Economic Short Comment （26 Dec 2023）
The rising prices of services in Japan and the US, which are similar but different～ The current state of inflation in Japan ～～4● Trend of Consumer Prices
The recent rise in consumer prices has decreased to 2.5% (Figure 1). The rate of increase has been declining since
January 23, when it peaked. Looking at the movement by item, therate of increase in food prices, which has pushed up the overall rate
so far, has gradually begun to decline. Against this backdrop, manypeople believe that the inflation rate will continue to gradually
decline in the future. On the other hand, it is increasingly believedthat the factors pushing up prices have shifted from one-off priceincreases for goods to increases in service prices.
Generally, rising prices lead to income pressure and act as a brakeon the economy, causing significant negative effects. However,【Figure 1】（％）
consumer price index（year-on-year）
4.5
foods
4.0
energy3.5communication
3.0
other
2.5
all
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10

when it comes to the rise in service prices, there are not a few
positive views. It is believed that the expansion of demand due tothe wage increase effect is supporting the rise in prices, and that it

19

As shown in Figure 2, the trends in the price increases of goods andservices are clearly different. The rise in service prices is progressingin the same way as in the United States, but it is generally believed
to be due to the effect of wage increases. In the United States, the212223【Figure 2】（％）
8is structurally different from cost-push inflation.

20（Source）MIC「consmer price index」

consumer price index（year-on-year）
services

6goods(excluding fresh food)4
2

tendency for service prices to push up overall prices is remarkable,

0Japan as well, it is expected that the rise in service prices will-2

continue due to the continued wage increase.

-4
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10
1920

21

2223

（Source）MIC「consmer price index」● Breakdown of Service Price Increases
However, it is necessary to make a careful judgment as to whether
the rise in Japan’s service prices should be viewed in the same
way as in the United States. This is because the rise in Japan isquite biased toward specific services. When the movement ofservice prices is divided by main elements, the main factor pushingthem up at present is mainly education and entertainment-related(Figure 3). And most of this is accounted for by the rise in hotel
prices. Other elements are lacking in upward momentum, withgrowth rates in areas such as eating out showing a downward
trend. If the wage increase effect is pushing up service prices, itwould not be strange for these to rise widely as well. In fact, against【Figure 3】

evolution of service prices（％）（year-on-year）
3.0
other
2.5
culture and entertainment
household
2.0
eating out
1.5transportation
1.0
all
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-3.0
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 101920212223（Source）MIC「consmer price index」※ The purpose of this document is to provide information and is not intended to solicit product transactions. Additionally, thisdocument has been created based on data deemed reliable by our company, but it does not guarantee accuracy or completeness. Thecontents mentioned in this document are as of the time of writing and may be subject to change without notice in the future.

1the backdrop of consumers’ savings-oriented mindset, there is a movement among various restaurant chains tolower the prices of some menu items.
● Background of Hotel Price Increases
Furthermore, when we look at the drivers of the rise in hotel prices, it is basically the increase in inbound tourism
that is at the center. The utilization status of hotels at present is moving in a direction where inbound tourism isexceeding the pre-corona level, while domestic customers are4). The reason for this is said to be the pressure on income due tototal number of hotel guests【Figure 4】（％） （year-on-year comparison for 2019）140
domestic guests
visitors to Japan120

inflation, as well as the rise in hotel prices. From an objective point

100of view, even if hotel prices continue to rise, it is difficult to give a very

80

positive evaluation. If the crucial domestic demand is decreasing

60

and the rise in prices is being supported by inbound tourism, then40

caution is required in judging the overall price situation. In order to20

view the rise in service prices as part of a virtuous cycle of wage

0

beginning to move in a direction below the pre-corona level (Figureincreases and price increases, it is necessary for other service prices,such as eating out and transportation, to rise as well.

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9212223（Source）TAA「travel statistics」（Reference）
Resona Research Institute Co.,LtdHideyuki Araki, Chief Economist
hd-araki@rri.co.jp※ The purpose of this document is to provide information and is not intended to solicit product transactions. Additionally, thisdocument has been created based on data deemed reliable by our company, but it does not guarantee accuracy or completeness. The
contents mentioned in this document are as of the time of writing and may be subject to change without notice in the future.

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