Annual household spending in Japan fell for a fifth straight month in August and factory output unexpectedly declined, highlighting the challenges policymakers face to revive an economy reeling under the strain of a sales tax hike.
The one bright spot came in data showing the jobless rate fell in August, while the availability of jobs stayed at a 22-year high, suggesting that improvements in the job market will ease some of the pain on households.
Still, it’s unlikely to be sufficient on its own to underwrite a solid rebound in the economy, especially as exports also continue to underperform. Internal affairs ministry data showed household spending fell 4.7 percent in August from a year earlier, weaker than a 3.8 percent drop forecast in a Reuters poll, as an April 1 sales tax hike to 8 percent from 5 percent continued to take its toll.
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