### Section 3. Trends of prices and workers' household expenditures

As for the price movement in 2012, the corporate goods price declined by 0.9% on a year-to-year basis, due to the concern over the global economy slowdown. In and after December 2012, the corporate goods price gradually increased on a year-to-year basis, in line with the weakening yen exchange rate. On the other hand, the general consumer prices (excluding fresh foods; so-called "core") decreased by 0.1% compared to the last year, down for consecutive 4 years, partly due to the price fall of consumer durable goods, etc.

Looking at the transition of workers' household expenditures in 2012, the consumer expenditures increased for the first time in 2 years, while the consumption was supported by the field of transportation and communication, etc. in which a new eco-car subsidy program was initiated. Consumer confidence has improved from January 2013, as consumer expectations have become higher mainly in terms of the employment environment.

## (Trends of prices)

In 2012, although the international commodity markets (such as crude oil) showed an upward trend, the domestic corporate goods price index declined by 0.9% on a year-to-year basis, reflecting the concern over slowdown of the global economy. By item, the index increased by 9.2% in the electricity, city gas and water utility and by 4.1% in agricultural and marine products, but declined in information and communication equipment, etc. of televisions and mobile phones, etc. (including smart phones) for which price competition is severe. In and after December 2012, the yen kept weakening and the index gradually increased, on a month-to-month basis, by gross average.

The corporate services price index in 2012 declined by 0.4% down for consecutive 4 years, being affected by the decline in the real estate, leasing and rental, information and communications, etc.

Looking at the transition of consumer price index according to Figure 8, the general consumer price index in 2012 remained at the same level as the last year, remaining unchanged for the first time in 4 years, and the general index excluding fresh foods (so-called core) declined by 0.1%, down on a year-to-year basis for consecutive 4 years. The decline of the general index excluding fresh foods, petroleum products and other special factors (so-called core-core) was larger, because the influence of price increase of petroleum products, electricity and gas was removed. By item, the light and water utility showed a general tendency of increase, but the culture and entertainment and furniture and household products showed a sign of downward momentum.

## (Trends of workers' household expenditures)

Looking at the consumer expenditure of workers' households in 2012 according to Table 9, the consumer expenditure of workers' households in 2012 decreased in the fields of housing, etc. due to the influence of the reconstruction demand of the Great East Japan Earthquake and the eco-point system for housing in the previous year; however, consumer expenditure increased in the fields of transportation, communication, etc. due to the new eco-car subsidy program and popularization of the Internet and mobile phones (including smart phones). In total, both nominal and real consumer expenditures increased by 1.6% compared to the last year, up for the first time in 2 years. In the following period of January to March 2013, the consumer confidence has improved thanks to the rise in stock prices and the consumer expenditure picked up, with 4.9% increase from the last year.

Looking at the retail sales in 2012 by business category (in existing stores), the sales decreased by 1.4% in super markets and by 0.3% in convenience stores, but department stores increased for the first time in 16 years, by 0.4% compared to the last year.

## (Consumer confidence has improved from the beginning of 2013)

According to Figure 10, the consumer confidence index (general households; seasonally adjusted) which represents consumer mind showed the lowest decline on a month-to-month basis (since April 2004 when the survey was started to be conducted on a monthly basis) in March 2011, and then gradually recovered to the level around 40; however, the index did not return to the level before the earthquake. As consumer expectations have become higher mainly in terms of the employment environment in response to the rise in stock prices, the emergency economic measures, etc., the index increased by 3.3 points in January 2013 (which was the largest increase since July 2004), and continued to increase for a consecutive three months until March, showing the sign of recovery in consumer confidence.

Also, the private consumption integrated estimates, which comprehensively shows the situation of consumption on demand and supply sides, increased for a consecutive 2 months since January 2013.