TOKYO”•Japanese household spending dropped again in April, official figures showed Tuesday, as consumers kept a tight hold on their purse strings despite years of government efforts to boost spending.
The fresh data attests to what analysts believe is a broader picture of the world’s third largest economy”•it is picking up steam overall but tepid consumption continues to act as a drag.
Spending by households of two or more people shrank 1.4 percent year-on-year, extending its declining streak of more than a year, according to data from the internal affairs ministry.
Japan’s prospects have been improving on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm.
The labor market is tight as separate data on Tuesday showed the nation’s jobless rate stayed at 2.8 percent in April, the lowest in more than two decades.
The labor ministry separately said on Tuesday that the ratio of job offers to job seekers in April was at a 43-year high of 1.48, meaning there were 148 offers to every 100 job hunters.
Official figures earlier showed Japan’s economy grew 0.5 percent in the first three months of the year”•or a 2.2 percent annualized growth rate.
That was its fifth straight quarterly rise and the longest string of gains since 2006.
Still, private consumption, which accounts for more than a half of Japan’s GDP, remains lackluster as cash-rich firms have been stingy with pay hikes.
The Bank of Japan has struggled to lift inflation despite years of aggressive monetary easing.
Inflation data released last week showed consumer prices rose for the fourth straight month in April but it was due largely to higher energy bills.
The rise, which came in at 0.3 percent, was still way off the BoJ’s 2.0 percent inflation target”•seen as crucial to conquering years of on-off deflation blamed for holding back the once-booming economy.