South Korea’s Household Consumption Falling

South Korea’s Household Consumption Falling

South Korea’s Household Consumption Falling

Private (household) consumption in South Korea fell in Q-1 on lower household income, a government report revealed Friday.

Monthly private consumption averaged 2,669,000 Won (US$2,262) per household during the January-March period, up 0.6% from the same frame last year, according to Statistics Korea.

Real private consumption, adjusted for inflation, declined 0.4% in Q-1.

The decline was attributable to lower household income. The monthly average household income was 4,555,000 Won in Q-1, up 0.8% from a year earlier.

However, the household income adjusted for inflation fell 0.2%, marking the downward trend for 2 Q’s running.

Earned income inched up 0.3% on lackluster employment, with lease income increasing 3.3% due to higher rents. But, property income fell 21% on lower interest income, caused by low interest rates.

Monthly average disposable income, which gauges household income minus non-consumption expenditure, was 3,704,000 Won per household in Q-1, up 1% from a year ago.

Consumption propensity, which means the ratio of private consumption to disposable income, was 72.1% in Q-1, down 0.3% from a year earlier.

The Q-1 ratio neared to the record low of 71.5% tallied in Q-3 of last year. The consumption propensity kept a downward trend since Y 2011, indicating the global economic slowdown and weak domestic demand that boosted worries about economic uncertainties.

Household spending on liquor and tobacco spiked 22.2% in Q-1 on a yearly basis due to a rise in cigarette prices.

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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