S. Korea's private consumption falls amid lower household income

Private consumption in South Korea fell in the first quarter amid lower household income, a government report showed on Friday.

Monthly private consumption averaged 2,669,000 won (2,262 U.S. dollars) per household during the January-March period, up 0.6 percent from the same period of last year, according to Statistics Korea.

Real private consumption, adjusted for inflation, declined 0.4 percent in the first quarter.

The decline was attributable to lower household income. The monthly average household income was 4,555,000 won in the first quarter, up 0.8 percent from a year earlier.

However, the household income adjusted for inflation fell 0.2 percent, marking the downward trend for two straight quarters.

Earned income inched up 0.3 percent amid lackluster employment, with lease income increasing 3.3 percent due to higher rents. But, property income tumbled 21 percent on lower interest income, caused by low interest rates.

Monthly average disposable income, which gauges household income minus non-consumption expenditure, was 3,704,000 per household in the first quarter, up 1 percent from a year ago.

Consumption propensity, which means the ratio of private consumption to disposable income, was 72.1 percent in the first quarter, down 0.3 percentage points from a year earlier.

The first-quarter ratio neared to the record low of 71.5 percent tallied in the third quarter of last year. The consumption propensity kept a downward trend since 2011, indicating the global economic slowdown and weak domestic demand that boosted worries about economic uncertainties.

Household spending on liquor and tobacco surged 22.2 percent in the first quarter on a yearly basis due to a surge in cigarette prices. Enditem