The Consumer Confidence Index expresses the "propensity to consume" in the following month, as a percentage score given by respondents on HILL's independent survey panel. Respondents are asked to rate their propensity to consume (i.e. their desire to buy products or use services) in the following month, taking 100 as the maximum propensity to consume. We have conducted these surveys every month since April 1993.

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Propensity to consume
for December 2008
55.4 points

During a typical year the Consumer Confidence Index, spurred on by seasonal factors, usually hits its highest mark for that year in December. For this December the index climbed 5.8 points from November to 55.4 points. However, this was a decline of 2.1 points from the same month last year and was the lowest score on record for any December. As a result, the average score for 2008 came to 51.6 points, which was lower than the previous all-time low average recorded in 2003.
The slowdown in the Japanese economy worsened since the summer of this year as the financial crisis placed a heavy drag on the global economy. Consumer sentiment was further chilled by growing concerns about the poor employment situation and reduced incomes due to shrinking bonuses. Japan's GDP is expected to record negative growth in the January-March quarter of 2009 for a fourth straight quarter. With no signs of just when the economy will begin to recover, anxiety about the future continues to grow. These conditions were strongly reflected in the Consumer Confidence Index figures for this month. With sluggish economic conditions expected to persist for the time being, it will be interesting to see the state of the Consumer Confidence Index at the start of the New Year.

A breakdown of the index by gender shows a 5.5-point increase for men from November to 50.3 and a 6.0-point gain for women to 60.5. These were both the highest scores for this year, but the score for men was down 2.6 points from December of last year and the score for women was down 1.5 points on year. In fact this was the lowest score for men and third lowest score for women for any December on record. The average annual scores for both men and women fell to all-time lows (previous record average annual lows were in 2003 and 2001, respectively).

A simultaneous survey of lifestyle priorities showed improvements in the propensity to spend on the three categories of "small everyday items", "medium-sized purchases" and "major (expensive) purchases" among both men and women. This improvement in the desire to spend can be attributed to receiving winter bonuses in December and the numerous activities associated with the year-end holiday season. Many men and women also showed a strong desire to spend on items in the "Life with family" category. This can be attributed to the busy year-end cleaning activities and making preparations for the New Year holidays.

Propensity to consume
for November 2008
49.6 points

The Consumer Confidence Index for November dropped 1.8 points from October to 49.6 points. This was a 1.5-point gain over November of last year, but still the second lowest score on record for this month after November of last year. This marked only the seventh time in the 16-year history of this survey that the score has fallen below 50 points. However, the score has now dropped under 50 points twice this year, the first time being in June. The only other time the score dipped under 50 points twice in one year was during 2003 when consumer confidence sunk to its lowest levels in the history of this survey.
The drop in gasoline prices was a positive factor, but domestic economic indicators continue to worsen. The DI in the Cabinet Office's Economy Watchers Survey fell to its lowest level on record and Household Income & Expenditure statistics fell for a seventh straight month. Stock markets have tumbled, leading exporters have slashed their earnings outlooks and winter bonuses are expected to be down for a second straight year. Good economic developments that could help stimulate consumption have been scarce.
Supermarket foods sales had been very solid thanks to a stronger inclination to eat at home, but these sales turned lower on-year in September for the first time in eight months. Consumers have become more reluctant to buy many food products all at once and instead are making smaller purchases of only the essential items they need. Clearly purse strings have become tighter and efforts among consumers to cut back on their spending have gained momentum. With just one month left in this year, it will be interesting to see if consumer confidence can rebound in December.

A breakdown of the Consumer Confidence Index by gender shows a 1.6-point drop for men from October to 44.8 points and a 1.9-point drop for women to 54.5 points. The November score for men was up 0.4 point on-year and the score for women was up a big 2.8 points, rebounding from the sizable drop during the same month last year. This was the lowest score for men this year, the second lowest score for any November and the third lowest score on record. For women, this was the third lowest score for any November.

A simultaneous survey of lifestyle priorities showed a worsening of the propensity to spend on the three categories of "small everyday items", "medium-sized purchases" and "major (expensive) purchases", all of which enjoyed slight improvements last month. There was a noticeable drop off in the percentages of both men and women expressing a stronger desire to spend on "small everyday items". In particular, the percentage for men was only 18.7%, dropping under 20% to mark its lowest level since October 2001. It appears that the propensity to spend will remain weak for the time being.

Propensity to consume
for October 2008
51.4 points

The Consumer Confidence Index for October climbed 1.3 points to 51.4 points for the first on-month rise in three months. However, this was a 1.9-point drop compared to October of last year, marking an on-year drop for the sixth straight month. There has not been six straight months of on-year declines since 2002 and so overall consumer sentiment remains at a low level.
This survey was conducted at a time of heightened concern about the economy as the US financial crisis spreads to other countries, stock prices tumble and the yen appreciates sharply. Survey participants have become very worried about their future as the outlook for the domestic economy become increasingly cloudy due to a string of poor economic indicators and data released by the government, Bank of Japan and others. There has been a lull in oil prices, but the prices of food and other daily necessities continue to rise. At the same time incomes have remained flat and so household purse strings have gotten tighter. The Ministry of Internal Affairs and Communications made the assessment that "consumption has turned lower" after its August Family Income and Expenditure Survey fell 4% on year. During a typical year this survey usually records a strong upswing in the propensity to spend in December. It will be interesting to see if this trend holds true this year in light of the difficult economic conditions. The overall average for this year is another point of interest.

A breakdown of the Consumer Confidence Index by gender shows a 0.4-point drop for men from September to 46.4 points, but a big 3.0-point gain for women to 56.4 points. Compared to October of last year this marked a 1.3-point decline for men and a 2.6-point setback for women. The score for men has now fallen on-year for two straight months and this was the second lowest score for any October. It is assumed that the financial crisis, falling stock prices and worsening corporate earnings have had a bigger psychological impact on men. The score for women was up on-month for the first time in three months, but was down on-year for a fifth straight month, the longest such losing streak since 2002.

A simultaneous survey of lifestyle priorities showed a strong desire to save and do without major purchases. However, in October both men and women showed a slight improvement in their propensities to spend on the three categories of "small everyday items", "medium-sized purchases" and "major (expensive) purchases". A large percentage of women also expressed a stronger desire to spend on "life with family", "hobbies and pastimes" and "personal relationships", suggesting that their spending patterns are turning more inward.

Propensity to consume
for September 2008
50.1 points

The Consumer Confidence Index for September dropped 1.4 points from August to 50.1 points. This was a 0.3-point drop from September of last year and marked the fifth straight month of on-year declines. Consumer sentiment clearly remains weak as this result was the second worst for any September in the history of this survey. The average monthly score for January-September of this year is 51.5 points, which is the second lowest after the 51.2-point average for the same period of 2003. With only three months left in 2008, there is growing interest in figures for the full year.
The DI in the Cabinet Office's August Economy Watchers Survey fell for a fifth straight month to its second lowest level on record. The Ministry of Internal Affairs and Communications also reported that consumer prices rose in July for the tenth straight month. The price of gasoline has come down and at the same time some supermarkets and restaurants, worried about losing consumers, have been lowering prices. However, consumers remain very thrifty and there are no signs of a let up for this trend.
Every three months this survey also investigates consumer spending on leisure. In August survey, our respondents spent 78,000 yen on summer-time leisure activities, which was the second lowest level for any summer since 2000 and off 40% from the peak recorded for the summer of 2006. So consumers remain defensive even in their spending on leisure.

A breakdown of the Consumer Confidence Index by gender shows a 2.5-point drop for men from August to 46.8 points and a 0.2-point slip for women to 53.4 points. Compared to September of last year this marked a 0.2-point drop for men and a 0.4-point slide for women. After rising slighting in August, the score for men was again down on-year, marking the lowest score for any September on record. The score for women has now fallen on-year for four straight months and this was the third lowest score for any September on record. Scores for women in their 30s and 40s were particularly weak.

A simultaneous survey of lifestyle priorities showed on-year drops in the desire among men to spend on the three categories of "small everyday items", "medium-sized purchases" and "major (expensive) purchases". In particular, the score for "major (expensive) purchases" fell to its lowest level on record. The percentage of women with a good propensity to spend on "small everyday items" held firm at around 26%, but the percentages of those willing to spend on "medium-sized purchases" and "major (expensive) purchases" still remain low.

Propensity to consume
for August 2008
51.5 points

The Consumer Confidence Index for August fell 1.2 points from July to 51.5 points. This was a 2.4-point retreat from August of last year, marking the fourth straight month of on-year declines. This was also the lowest score for any August on record. Since June there has been three straight months of all-time lows.
The government confirmed in its August Monthly Economic Report that the economy has essentially entered a downturn. Leading indicators in the Cabinet Office's Consumer Confidence Index and Economy Watchers Survey were at their lowest levels ever in July. Meanwhile, the Consumer Price Index in June was up for a ninth straight month due to the ongoing rush to hike prices for a host of items. The Consumer Confidence Index has not seen record lows for three straight months since the March-May period of 2004, at which time the society felt uneasy about the bird flu scare and the sending of Japanese Self-Defense Forces to Iraq. The drop in consumer confidence will likely become even more pronounced due to the economic downturn, stagnant wages and ongoing rise in prices. With no signs of improvement in consumer confidence, the inclination towards thriftiness among consumers will likely continue. Therefore, it will be important to monitor the Consumer Confidence Index from September.

A further breakdown of the August Consumer Confidence Index by gender shows a 1.3-point gain for men from July to 49.3 points, but a 3.9-point drop for women to 53.6 points. Compared to August of last year, this was a 0.3-point gain for men, but a big 5.4% slide for women. This was a modest recovery for men after scoring all-time lose in June and July. However, the score for women has now fallen on-year for three straight months and this was the lowest score for any August since 2000.

A simultaneous survey of lifestyle priorities showed a slight recovery for the desire to spend on "small everyday items", but the propensity to make "medium-sized purchases" and "major (expensive) purchases" remains weak. Scores for men were lower in all three categories and less than 10% of the respondents said that they were eager to spend on "medium-sized purchases". Women showed an increased propensity to spend on "small everyday items", but their scores for "medium-sized purchases" and "major (expensive) purchases" slumped to their lowest levels for the year. Comments from members of our panel included "I need to save for the future", "prices are high so I have to be thrifty", "I can't be wasteful" and "even if there is something I want, it's too expensive and so I have to do without". This suggests that consumers are becoming much more cautious in their spending habits.

Propensity to consume
for July 2008
52.7 points

The Consumer Confidence Index for July climbed 3.6 points from June to 52.7 points, but this was the lowest score for any July since the launch of this survey in April 1993. The score last month was also the lowest for any June on record. This was a 1.5-point drop from July of last year for the third straight month of on-year declines. During each year the propensity to spend tends to increase the most in July and December, but the results for this July are rather weak compared to those for a typical year.

According to the Bank of Japan's quarterly Tankan survey, business sentiment has worsened for three straight quarters. Business confidence among big corporations was worse than the level seen last November. The sudden drop in stock prices and other factors have contributed to a sense that the economy is slowing. The continuous rise in prices for goods has also chilled consumer sentiment. Consumers may become much more defensive following the announcements in July of higher prices for electricity, gas, food, sundry goods and a host of other items. The June Consumer Confidence Index released by the Cabinet Office also fell to its lowest level on record.
Some people believe that the economy will see a gradual recovery from the second half of this year, but at this stage it is hard to find any factors that could spur on such a recovery. Against this difficult background it will be very interesting to see how consumer confidence changes during the second half of the year.

A breakdown of the July Consumer Confidence Index by gender shows a 2.3-point gain for men from June to 48.0 points and a big 5-point jump for women to 57.5 points. Compared to July of last year, this was a 0.9-point decline for men and a 2.1-point setback for women. This was the lowest score for men for any July since the launch of this survey, after last month marking the lowest score on record for any June. For women this was the lowest score for any July since 2003. The figures were particularly weak for both men and women in their 50's and older.

A simultaneous survey of lifestyle priorities showed a slightly stronger desire among men to spend on "major (expensive) purchases" and "medium-sized purchases" after getting their summer bonuses. However, the propensity to spend among women was in general a bit weak again this month.

Propensity to consume
for June 2008
49.1 points

The Consumer Confidence Index for June sank 3.6 points from May to 49.1 points to mark the third lowest score overall and the lowest score for any June since the launch of this survey in April 1993. This was also a big 4.0-point setback from June of last year. The average score for the January-June period was 51.5 points, the lowest average for a first-half since 2003 and 2004 when consumer confidence was particularly weak.
The Cabinet Office announced that the Indexes of Business Conditions (coincident index) fell in April for the second straight month, adding that the economy could be entering a recession. The Ministry of Internal Affairs and Communications also reported that its Consumer Price Index was higher in April for a seventh straight month of on-year gains as prices for a host of everyday items continue to rise. Gasoline prices in particular appear seem set to head higher, which will only put more pressure on household budgets. The Japan Business Federation is also forecasting that summer bonuses this year will be roughly unchanged from levels seen last year.

Personal consumption is becoming sluggish due to the slowing economy, higher prices and stagnant earnings and this fact is clearly reflected in June's Consumer Confidence Index. During a typical year the propensity to spend improves during July-August as people want to spend more on summertime leisure and recreation activities. It will be interesting to see how much this index can recover in the coming months against this difficult economic environment.

A further breakdown of the June Consumer Confidence Index by gender shows a 2.4-point drop for men from May to 45.7 points and a big 4.7-point slide for women to 52.5 points. Compared to June of last year this was a 2.4-point setback for men and a huge 5.6% drop for women. These were also the worst scores for both men and women for any June since the launch of this survey. For the January-June period the average monthly score for men was 47.5 points and the average score for women was 55.5 points, the lowest levels seen in many years.

A simultaneous survey of lifestyle priorities showed that the desire among men to spend on "small everyday items" remained weak for a second straight month, but improved slightly for women. However, the propensity among women to spend on "small everyday items", "medium-sized purchases" and "major (expensive) purchases" were all lower on-year for a second straight month.

Propensity to consume
for May 2008
52.7 points

The Consumer Confidence Index for May rose 1.0 point to 52.7 points. Compared to May of last year this was a 0.2-point reduction, again turning lower after last month scoring the first on-year gain in six months. This was also the lowest score for any May since 2005. The Ministry of Finance and the Bank of Japan recently lowered their assessments of the Japanese economy. Compared to this time last year there has also been a big increase in the number of corporations lowering their forecasts for the just-ended fiscal year.
Household budgets have also come under increased pressure from rising prices for food and other every day necessities, as well as higher prices for energy such as electricity and gas. There was a huge jump in the March Consumer Price Index released by the Ministry of Internal Affairs and Communications. The Cabinet Office's Economy Watchers Survey for April also pointed toward worsening conditions both now and going forward. A provisional gasoline tax was also reinstated in May, making prices higher for consumers at the pumps. As a result, the current economic environment has become very difficult and not supportive of an increase in consumer confidence.
However, the Consumer Confidence Index for May managed to work higher compared to April. This is likely due to seasonal factors, particularly the desire to spend more on leisure activities during the Golden Week holiday.

A closer examination of the May Consumer Confidence Index by gender shows a 0.7-point increase in the score for men to 48.1 points and a 1.2-point increased for women to 57.2 points. Compared to May of last year this was a 0.7-point decrease for men, marking the first on-year retreat in four months, but a slight 0.1-point increase for women, the first such on-year gain in four months.

A simultaneous survey of lifestyle priorities showed increases among both men and women regarding their propensity to spend on "hobbies and pastimes" with May being a key holiday season. Compared to the previous month there was a slight improvement in the desire to "purchase things", but the propensity to spend on "small everyday items" remained at low levels for both men and women. Compared to May of last year women were less eager to spend on "small everyday items", "medium-sized purchases" and "major (expensive) purchases". So clearly the purse strings for women remain very tight.

Propensity to consume
for April 2008
51.7 points

The Consumer Confidence Index for April increased 0.6 point from March to 51.7 points. This was a 0.4-point gain compared to April of last year, marking the first on-year rise in six months. This was also the first time in six months that the score was higher both on-month and on-year.
There are growing concerns that the domestic economy is slowing following a sharp deterioration in the Bank of Japan's March quarterly "tankan" survey of corporate sentiment and with the Cabinet Office's Index of Coincident Economic Indicators falling under the 50% boom-or-bust threshold in February for a second straight month.
Furthermore, the Ministry of Internal Affairs and Communications' Consumer Price Index for February rose to its highest level since March of 1998. In April the price of gasoline has come down due to the expiration of a provisional gasoline tax, but consumers continue to tighten their purse strings as prices for bread, cooking oil and many other daily necessities continue to rise. During a typical year this survey tends to see a stronger propensity to spend in May, but in light of the difficult economic environment now confronting consumers, it will be important to see whether or not the recovery in the Consumer Confidence Index will continue next month.

A breakdown of the April Consumer Confidence Index by gender shows that the score for men remained flat compared to March at 47.4 points, while the score for women increased 1.2 points to 56.0 points. Compared to April of last year this was a 2.1-point gain for men, but a 1.3-point setback for women. The on-year score for men has now risen for three straight months, but the same score for women has now fallen for three straight months.

A simultaneous survey of lifestyle priorities showed a slight improvement among men regarding their desire to spend on "small everyday items" as compared to March, but their propensity to spend on "medium-sized purchases" fell back to the level seen in February.
For women there was a slight improvement in their desire to spend on "medium-sized purchases" after a mild downward trend in February and March. On the other hand, the desire among women to spend on "small everyday items", which last month fell to the lowest level since the launch of this survey back in May of 2000, lost even more ground.
The on-year drop in the propensity to spend among women, particularly those in their 30s and 40s who are most sensitive to the recent flurry of price hikes, suggests that more and more women are becoming increasingly frugal in their spending patterns.

Propensity to consume
for March 2008
51.1 points

The Consumer Confidence Index for March 2008 increased 0.8 point from February to 51.1 points. Despite marking a mild recovery from the previous month, this was still the lowest score for any March since 2005. Compared to March of last year this represented a 0.9-point drop for the fifth straight month of on-year declines.
The prospects for corporate earnings have become clouded by the stronger yen, weaker equities markets and surging prices for raw materials. Family budgets are also coming under more pressure due to sluggish wage growth and higher prices for gasoline, food and a wide range of other daily necessities. The economic outlook is becoming much more uncertain and prices of goods will likely keep rising. The Cabinet Office's consumer confidence index for February was down for a fifth straight month, sliding to its lowest level since March of 2003.

A further breakdown of the March Consumer Confidence Index by gender reveals a 0.7-point gain from January for men to 47.4 points and a 1.0-point gain for women to 54.8 points. Compared to March of last year this marked a 1.0-point gain for men, but a 2.9-point setback for women. This was the first time in a long while that the on-year score for men was up for two months in a row. On the other hand, the score for women has now fallen for two straight months.

A simultaneous survey of lifestyle priorities showed a slight improvement for men in terms of their desire to make "medium-sized purchases" and "major (expensive) purchases" as compared to the scores last month, which were close to their lowest levels for the past year. Last month there was a big drop among women regarding their desire to spend on "small everyday items" and "medium-sized purchases". This trend has carried over into March with the propensity to spend on "small everyday items" falling to the lowest level since the launch of this survey back in May of 2000. It appears that the rising prices of everyday goods and services are making women much more aware of the need to protect their family budgets.

Propensity to consume
for February 2008
50.3 points

The Consumer Confidence Index for February 2008 retreated 3.8 points from January to 50.3 points. This was a 0.6-point drop from February of last year and marked the fourth straight month with an on-year decline. During a typical year the Consumer Confidence Index tends to lose ground in February, but this was still the lowest score for any February since 2004.
Consumer are becoming increasingly concerned about the outlook for the domestic economy with the stock markets continuing to slide and with the Cabinet Office's Economy Watchers Survey for January showing a lower DI for the 10th straight month. At the same time prices for more goods and services essential for daily life have been increasing, putting more pressure on household budgets. It will be interesting to see whether these difficult conditions have a big impact on the Consumer Confidence Index in March or if sentiment can rebound.

A breakdown of the February Consumer Confidence Index by gender shows a 2.9-point drop from January for men to 46.7 points and a 4.9-point setback for women to 53.8 points. This was the lowest score for women for any February since 2004. Compared to February of 2007 this marked a 0.7-point gain for men, but a 2.0-point drop for women. The score for men remains at a low level, but this was still the first on-year improvement in eight months.

A simultaneous survey of lifestyle priorities showed that men were less inclined to spend on "small everyday items", "medium-sized purchases" and "major (expensive) purchases" as compared to January. In fact, scores for all three categories were at their lowest levels for the past year. The scores for "small everyday items" and "medium-sized purchases" for women fell by more than 10 points due to less spending on winter bargains and the pinch from higher prices for common goods and services. There are some seasonal factors in play, but these results suggest that both men and women are becoming much more cautious with their spending habits.

Propensity to consume
for January 2008
54.1 points

The Consumer Confidence Index for January 2008 fell 3.4 points from December to 54.1 points. This marked a 0.6-point setback from January of last year and was the third straight month with an on-year decline. However, this was still the second best score after the last year for any January since 2002.
2008 has started with a strong yen, high crude oil prices and weak stock markets due to the subprime mortgage loan market mess and other factors. There are also fears of a slowdown in the domestic economy during the first half of this year. Prices for food and daily necessities are also expected to keep rising and so consumers are expected to become increasingly cautious. The Consumer Confidence Index came in at a rather high level for January despite this challenging backdrop and so it will be important to carefully monitor how the index fares in the coming months.

A further break down of the Consumer Confidence Index by gender shows a 3.3-point decrease from December to 49.6 for men, which was 1.5 points lower than the score for January last year. The score for women came to 58.7 points, which was a 3.3-point drop from December, but a slight increase of 0.4 point compared to January of last year. This was the highest score for women for any January since 2001, but the score for men was down on-year for a seventh straight month. The trend of strong scores for women covering the weak scores for men appears to be continuing into the new year.

A simultaneous survey of lifestyle priorities in January showed a decrease in the desire to spend on "small everyday items", "medium-sized purchases" and "major (expensive) purchases" among men as compared to December. For women there was a slight decrease in their desire to spend on "major (expensive) purchases", but the scores for their desire to spend on "small everyday items" and "medium-sized purchases" hit their highest levels for the past 12 months thanks in part to bargain sales on certain winter items.

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