Japan: Consumer pessimism deepens in July
Latest reading: Consumer sentiment fell to 33.7 in July from June’s 34.5, reinforcing the downtrend in place since April last year. The index remaining entrenched below the 50-threshold, indicating sustained pessimism among consumers.
All subcomponents of the consumer sentiment survey improved in May and June, but in July, all deteriorated. The decline in July may partly reflect worries about the impact of U.S. tariffs on jobs in export-orientated sectors like the auto industry. Meanwhile, consumers’ willingness to buy durable goods remained the weakest subcomponent, likely reflecting the impact of recently high inflation on disposable income.
Outlook: July’s bodes poorly for Q3 private spending growth, which our panelists expect to remain tepid for the fourth consecutive quarter and to fall to the weakest rate in six quarters.