Tokyo - Spending among Japanese households fell a steeper-than-expected 4.7 percent in August, logging a year-on-year drop for the fifth straight month since a sales tax rise, official data showed Tuesday.
The fall was sharper than the market median forecast of a 3.6 percent drop and came after a 5.9 percent plunge in July.
Retail sales had got a boost ahead of the April 1 sales tax rise - Japan's first in 17 years - as shoppers made a last-minute dash to buy staples and big-ticket items such as cars and refrigerators.
But spending turned down right after the levy hike, weighing on activity and exacerbating worries that the higher tax would weigh on consumer spending and a wider economic recovery.
The unemployment rate has been staying low.
Data released also from the internal affairs ministry on Tuesday showed the jobless rate fell to 3.5 percent in August from 3.8 percent in July.
The tax rise was seen as crucial for shrinking Japan's mammoth national debt, proportionately the worst among wealthy nations.
But the recent lacklustre data was forcing policymakers to take a hard look at whether to go head with earlier plans to raise sales taxes again next year. - Sapa-AFP