By Yoon Ja-young
Staff Reporter
Households are increasing consumption as consumer sentiment is showing signs of improvement in line with increased hopes of stronger economic growth in the second half and beyond.
According to the National Statistical Office (NSO), the average propensity to consume rose in all households except in those headed by 30-something year olds in the second quarter.
The average consumption propensity is the ratio of consumption spending to total disposable income - that left after subtracting non-consumption spending such as taxes, social insurance expenses and money transferred to other households.
Households headed by those in their 20s showed most expanded spending.
Their monthly consumption recorded 1.78 million won, up 120,000 won from a year ago, while their disposable income stood at 2.32 million won, 70,000 won up from the previous year. Their average consumption propensity rose to 76.83 percent from 73.81 percent a year ago.
Households led by those in their forties had 2.89 million won monthly disposable income, up 30,000 won from a year ago, and they spent 2.36 million won each month on average, up 70,000 won from the previous year. Their average consumption propensity recorded 81.74 percent, slightly more than 80.03 percent of a year ago.
Those in their thirties, meanwhile, seem to be marginalized from the economic recovery. Their average consumption propensity stood at 77.13 percent, down 1.55 percentage points from a year ago. While their monthly disposable income recorded 2.82 million won, up 140,000 won from the previous year, they expanded spending by only 70,000 won.
The NSO explained those in their 30s are not increasing consumption as much as their growing income due to rising housing prices and concerns over the future.
The housing price hike during the last couple of years have left those in their 30s with little capital to buy houses.