Prices and Worker's Household Expenditure Trends

Chapter 3 Prices and Worker's Household Expenditure Trends

Consumer prices have declined four years in a row due to reduced costs and inactive consumption, and domestic corporate goods prices dropped two years in a row, although the margin of the drop became smaller, clearly indicating a deflationary trend.
Household consumption decreased five years in a row, despite some improvement in consumer sentiment, due to sever employment/income situation.

Price Trends
The prices in 2002 clearly indicated a deflationary trend, as exemplified by the drop in consumer prices for four years in a row. The trend in deflating prices is considered to be the result of lower costs reflecting technological innovation and competition with inexpensive imports and continuing inactive consumption.
Domestic corporate goods prices continued declining throughout 2002. However, the extent of the drop narrowed, due to higher coal and petroleum product prices reflecting rising crude oil, and due to steel product prices, which had dropped in the previous year but leveled off as a result of a completion of inventory adjustment.
Consumer prices in 2002 dropped for the fourth year in a row, down 0.9% from the previous year. The main reason for this was the declining trend in industrial product prices, such as consumer durables, including personal computers and home electric appliances, and textile products e.g. clothes, due to competition with imports and technological innovation (Figure 9).

Workers Household Expenditure Trends
The consumption expenses of worker households in 2002 decreased for the fifth year in a row from 1998 due to the low growth of net income, down 1.3% in nominal terms and down 0.2% in real terms, even though the decline was smaller than in the previous year (Table 10).
Propensity to consume stood at 73.1%, up 1.0 percentage point from the previous year, reflecting the gradual recovery of consumer attitude up until the July-September period, but these had stalled by year-end.
The amount of average savings per household, as of the end of June 2002, decreased for two years in a row. It appears that reduced income due to the severe employment situation affected the amount of savings.
Supply side statistics showed a weak performance on the whole. Retail sales in 2002 declined for six years in a row, down 3.9% from the previous year. This demonstrated a greater decline than the previous year.

Top

Index / Back / Next