TOKYO--Japanese consumers again cut spending in January despite steady employment growth, in a further setback to an economy balancing on the edge of recession.
Household spending fell 3.1% in January compared to the same month a year earlier, adjusted for price changes, after a 4.4% decrease the previous month, according to data released Tuesday by the Ministry of Internal Affairs and Communications. That marked the fifth consecutive month of decreases and compared with a 2.7% fall expected by economists polled by The Wall Street Journal and the Nikkei.
The unemployment rate fell to 3.2% in January from 3.3% in the previous month, the ministry said. Economists expected no change.
A different gauge of job growth, released at the same time by the Ministry of Health, Labor and Welfare, showed that there were 128 jobs for every 100 job seekers in January. That compared with 127 in December and was the best showing since December 1991. Economists expected no change.
The data follow a spate of indicators suggesting that Japan's economy, the world's third-largest, is struggling to escape weakness following a contraction in the final three months of last year.
Industrial output rebounded in January, but a sharp pullback is expected in February in the face of uncertainties over global growth fueled by China's economic slowdown, according to government data released Monday. Some brokerages, including Barclay's and SMBC Nikko Securities, say it is possible the economy will shrink in the January-March quarter. That would be the second straight quarter of contraction, which meets one common definition of a recesion.
Write to Takashi Nakamichi at takashi.nakamichi@wsj.com
