TOKYO -- Japanese households are saving a third of their disposable income even though their earnings are up due to more women in the workforce, reflecting a general anxiety over pensions and future health care costs.
A household with two or more people spent an average 292,284 yen ($2,666) of their monthly disposable income in the first quarter of this year, up effectively 1.9% from a year earlier, according to a government survey released on May 10.
The modest rise is a result of higher hotel and travel bookings seen before the 10-day Golden Week holidays from late April to early May, but consumption is far from robust. Household spending for January to March logged a 0.2% dip, after seasonal adjustment, from the previous quarter that ended in December.
"People are curbing spending on items that are unnecessary or non-urgent," said Koya Miyamae at SMBC Nikko Securities. "Consumption should be considered weak."
This trend is evident in the way people set aside a significant portion of their disposable income. The monthly surplus, or the amount left over after living expenses, accounted for 30.8% of disposable income in the year ended in March.
For that year, a household with two or more members had monthly income of 565,271 yen, up 0.5% on the year. While income rose as more women joined and remained in the workforce, people opted to save more rather than spend.
"The reason more retirees and spouses are working has more to do with saving for the future than wanting money to spend now," said Takuya Hoshino of the Dai-ichi Life Research Institute. People are increasingly worried about their pension and medical costs, he added.
Rising social security taxes are also discouraging consumption, said Keiji Kanda of the Daiwa Institute of Research, adding that with concerns that social security benefits will be reduced going forward, consumers are feeling the need to build a safety net with savings.
Meanwhile, wages adjusted for inflation slid 2.5% on the year in March, according to preliminary government data released on May 10. The economic outlook remains uncertain due to factors like the prolonged U.S.-China trade dispute.