The Consumption Activity Index
May 2, 2016
Research and Statistics Department
Bank of Japan
In this paper, we introduce the Consumption Activity Index (CAI). The CAI uses a variety of sales and supply-side statistics on goods and services as its source statistics and is provided as a measure for capturing short-term consumption activity on both monthly and quarterly bases. The CAI traces movements of consumption in the household side of the economy, much like those in the Annual Report on National Accounts (ARNA) - the most comprehensive statistic representing nationwide consumption activity - but delivers in a more timely fashion. Unlike demand-side statistics, this index shows only small fluctuations emanating from sample rotations, and also exhibits a high correlation with a number of confidence survey measures. Various versions of the CAI are available - nominal and real indexes as well as those both including and excluding inbound consumption - and they are designed to help users according to their analytical needs. Based on the above-mentioned properties, the CAI will contribute to proper assessment of the actual movements of consumption activities in Japan.
The authors would like to thank Toshitaka Sekine, Masahiro Higo, Takuji Kawamoto and the staff of the Bank of Japan for their helpful comments. The authors are also grateful to Naoko Ozaki and Ko Miura for their collaboration on the construction of the dataset used for the analysis. Any errors or omissions are the responsibility of the authors. The views expressed here are those of the authors and should not be ascribed to the Bank of Japan. The English translation was mostly prepared by Chikako Wakasa.
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