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The key gauge of the current state of the economy was above the boom-or-bust line of 50 percent in January for the first time in three months, the government said Friday.

The index of coincident economic indicators stood at 88.9 percent, a jump from a revised 40 percent registered in December, the Cabinet Office said in a preliminary report.

Despite the enormous monthly advance, the government still considers the economy to be in an overall neutral trend, a Cabinet Office official said.

“The index of coincident economic indicators has followed a zigzag course since October,” the official said on condition of anonymity. “The basic trend is one of advancing and retreating.”

All components, save for industrial production, logged positive figures, which elevated the coincident index.

A reading above 50 percent is considered a sign of economic expansion, while a figure below that is seen as a sign of contraction, according to Cabinet Office economists.

The official said the coincident index will probably be around 50 percent or slightly higher for February.

The index of leading indicators, which measures economic moves about six months ahead, came to 44.4 percent in the latest reporting month, falling below 50 percent for the first time in three months.

The index of lagging indicators, which gauges economic performance in the recent past, was at 33.3 percent, remaining below 50 percent for two consecutive months.

The diffusion indexes compare the current levels of various economic data with their levels three months prior.

Households spent less

Average household spending fell a real 1.5 percent in January from a year earlier to 298,980 yen, down for the third straight month, the government said Friday.

The margin of decline is smaller than the 2 percent fall in spending by wage-earning households alone for January.

Overall household spending on clothing and footwear contracted 6.7 percent from a year earlier, while spending on food dropped 2.3 percent, the Public Management, Home Affairs, Posts and Telecommunications Ministry said.

In other spending categories, expenditures on furniture and other household goods dropped 1.9 percent, while spending on books, other educational items and entertainment declined 1.6 percent.

Spending on education rose 10.3 percent.

Outlays for water, fuel and electricity rose 2.8 percent and spending on transportation and telecommunications increased 1.3 percent.

Household spending is a key gauge of personal spending, which accounts for about 60 percent of Japan’s gross domestic product. Wage-earning households’ outlays make up 60 percent of total household spending.

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