TOKYO \u2014
Japan\u2019s household spending fell in December for the 10th consecutive month, the government said Tuesday, the latest in a series of blows to the nation\u2019s faltering growth plan.
Prime Minister Shinzo Abe came to office in December 2012 and launched his \u201cAbenomics\u201d growth plan\u2014a mix of massive monetary easing, government spending and red-tape slashing\u2014but growth remains fragile and inflation well below target.
The world\u2019s third-largest economy has been struggling to reverse years of on-and-off deflation and lacklustre economic growth.
Last week, Japan said it logged its first annual consumer price decline in four years, as weak household spending and meagre wage hikes keep a lid on prices.
Tuesday\u2019s official figures showed that household spending declined 0.3% from the year before, though better than market expectations of a 0.9% decline.
The job market, however, remained tight. The unemployment rate was unchanged at 3.1% in December, while the ratio of job offers to job seekers stood at 1.43 in December\u2014meaning there were 143 jobs for every 100 job hunters\u2014the highest since 1991.
The government also said factory output gained 0.5% in December from the previous month, slightly better than expectations of a 0.3% increase.
Bank of Japan (BOJ) officials have blamed external factors, such as falling energy prices and uncertainty related to emerging economies, for their failure to achieve a promised two percent inflation level.
The central bank now expects to reach that goal by March 2019\u2014four years later than planned.
The BOJ concludes its first monetary policy meeting of the year later Tuesday with Gov Haruhiko Kuroda scheduled to hold an afternoon news conference.
\u201cWhile the corporate sector is recovering steadily, consumer sentiment remains stagnant as people are concerned about future uncertainties,\u201d said Yusuke Shimoda, economist at Japan Research Institute.
\u201cThe nation\u2019s entire economy is lacking strength as spending, which accounts for some 60 percent of GDP, is still slowing,\u201d Shimoda told AFP.
Deflation can discourage spending by consumers, who might postpone purchases until prices drop further or just save their money, creating further pressure on businesses.
The BoJ had hoped that consumers would spend more if prices were rising, but wage growth has fallen below expectations, meaning workers have less money to spend.
Falling prices also discourage companies from making capital investments, while also slowing production.
\u00a9 2017 AFP<\/p>\n