Japanese households boost spending despite inflation hit

Japan’s household spending rose for a fifth month, providing some support for an economy that analysts say contracted in the third quarter, but coming in below expectations.

Outlays by households adjusted for inflation gained 1.8% in September from a year earlier, led by transportation and entertainment, the internal affairs ministry reported Friday. The result missed the median economist estimate of a 2.5% rise, with falling spending on housing and education dragging on overall figures.

Consumption accounts for more than half of Japan’s gross domestic product. While spending held up despite the hit from inflation, a GDP report on Nov. 17 is forecast to show the economy has contracted in the three months through September, ending a five-quarter period of expansion. Exports have fallen while housing starts dropped due to regulatory changes.