Japanese Consumers' Confidence Declines

Consumer confidence in Japan declined in December to 44.3 from 47.9 in Novemberand was almost 10% below the peak reached in August of this year. It was also below consensus. The outlook for overall livelihood, income growth, employment and willingness to buy durable goods--components that make up the index--are all down almost 10% or more from August as shown in the table below.

A value below 50 indicates that consumers expect conditions to be somewhat worse. Consumers are asked to rate the prospects for their general livelihood, income growth, employment and their willingness to buy durable goods. If the expectation is for better, it is given a !; if slightly better, .75; if no change, .50; if slightly worse, .25; and if worse; 0.

Monthly data are available only since April of last year. In June of 2004, the Economic and Social Research Institute of the Cabinet Office combined the old Quarterly Consumer Confidence Survey, the Monthly Consumer Confidence Survey covering Tokyo and the One-person Household Consumer Survey into one survey called the Monthly Consumer Confidence Survey covering all Japan. Monthly data from April 2004 on are now available for All Households, One-person Households and 2 or More Persons Households. For each type of household, data are available on consumers' appraisals of the outlook for their over all livelihood, income growth, employment, willingness to buy durable goods, and the value of their assets. An appraisal of leisure prospects is also available quarterly. Prior to that time, there are quarterly data based on the discontinued Quarterly Consumer Confidence Survey covering 5040 households, excluding single-person households. These data, available in the Haver Japan data base under the Consumer Confidence Index (Households with 2 or More Persons) are shown in the attached chart, together with the quarterly values of the new monthly data.

In spite of the dip in the fourth quarter, the level of confidence among Japanese consumers is relative high. According to the quarterly data Japanese consumers have rarely scored a level of confidence above the 50 level.