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JPY: Jobless rate edges up, household spending also jumps – Deutsche Bank

FXStreet (Delhi) – Darren Gibbs, Chief Economist at Deutsche Bank, notes that Japanese jobless rate edged up to 3.4% in August and jobs-to-applicant ratio rises, in addition to the jump in household spending.

Key Quotes

“Employment fell 30k in August but was up 0.3% yoy. As a result the unemployment rate edged back up to 3.4%. The jobs-to-applicants ratio rose a further 0.02pps to a fresh high of 1.23.”

“The spending index (excluding housing, autos and transfers) rose 2.9% mom and our consumption index (designed to match GDP-based private consumption) was up 0.8% mom.”

“The July-August average over Q2 is 0.6% higher for the headline series, 1.1% higher for the spending index and 0.8% higher for our consumption index, all pointing to a rebound in Q3 consumption. September is likely to support leisure-related spending due to an unusually long holiday season.”

“We reiterate that the headline number in the Household Survey, the only consumption data the market watches, is not reliable due to a small sample of 8,000 households, in which one-sixth is replaced every month. The synthetic consumption index, compiled by the Cabinet Office and released about ten days after the Household Survey, has a very high correlation with GDP-based private consumption, to which we should pay more attention.”

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