May data shows stronger-than-expected consumer spending in Japan, while wage growth missed estimates, signaling mixed economic signals.
Japan’s household spending surged 3.7% month-over-month in May, exceeding the 1.4% forecast and reversing a prior decline. Year-over-year spending fell 0.3%, an improvement from the expected -2.5% drop and the prior -0.5% reading.
Wage growth disappointed, with average cash earnings rising 3.2% year-over-year, below the 3.4% estimate. Same-sample base cash earnings held steady at 2.9%, while overtime pay growth slowed to 2.9% from 4.2% previously.
The data reflects resilient consumer activity but persistent wage pressures, complicating the Bank of Japan’s policy outlook.