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Japan Spending Remains Unchanged

March 2, 2001

TOKYO (AP) _ Amid increasing concern over the outlook for Japan’s economy, spending by Japanese wage earners remained flat in real terms in January compared to a year earlier, the government said Friday.

Japanese wage earners spent $2,846 on average last month, roughly the same as in the same period last year, according to the Ministry of Public Management, Home Affairs, Posts and Telecommunications.

Wage earner spending is an important gauge of personal consumption, which accounts for about 60 percent of Japan’s gross domestic product.

The flat figure in January, following a small rise in December, reflected growing worries over the slowing economic recovery and sharp declines in Japanese stock prices.

Still, the spending figure was slightly higher than a forecast by economists surveyed by Dow Jones, who estimated on average that spending decreased 0.7 percent on year. The estimates for the data, which are generally volatile, ranged from a decline of 3.5 percent to a rise of 0.2 percent.

The latest data indicated a reduction in wage earners’ overtime, possibly because of a sharp fall in industrial production last month, according to the ministry.

Japan’s industrial production fell a record 3.9 percent on month in January, as companies cut back output in response to slowing exports and falling stock prices.

In January, the propensity for wage earners to consume, a ratio which measures the amount of disposable income that went to household spending, fell to 71.7 percent from 75.6 percent in December on a seasonally adjusted basis, the ministry said.

Disposable income is real income minus such outlays such as tax and social insurance payments.

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