Consumer confidence worsened in February amid a decline in the country’s corporate performance and China’s economic slowdown, the Cabinet Office said, downgrading its assessment of the index for the second consecutive month.
Another survey, also released by the office on Tuesday, showed business confidence among workers with jobs sensitive to economic conditions, such as shop clerks, taxi drivers and restaurant employees, deteriorating for the second straight month due to falls in stock prices and a strong yen.
In the consumer confidence survey, the seasonally adjusted index of sentiment among households made up of two or more people fell 2.4 points from January to 40.1, down for the second straight month and registering the sharpest decline since October 2013, the office said. A reading below 50 suggests pessimists outnumber optimists.
As all of the index’s four components worsened, the office revised downward its basic assessment, saying consumer sentiment is “leveling off,” compared with the previous month’s view that “the pace of the pickup in consumer confidence is becoming moderate.”
Among the four components, consumers’ assessment of employment conditions dropped 3.7 points to 42.1, while their view of livelihoods declined 2.4 points to 38.5.
Readings for income growth and readiness to buy new durable goods shed 1.4 points and 2.1 points, respectively, to 39.8 and 39.9.
A Cabinet Office official said consumer confidence was affected by Toyota Motor Corp.’s suspension of its domestic production in February due to parts shortages caused by an explosion at a steel plant and Sharp Corp.’s decision to accept a takeover bid by Taiwan’s Hon Hai Precision Industry Co. in the reporting month.
The survey also showed weaker inflation expectations as 77.4 percent of households said they expect consumer prices to rise in the year ahead, down 1.9 percentage points from January. The percentage fell for the third consecutive month.
The consumer confidence survey, conducted on Feb. 15, covered 8,400 households, including single-member households, with valid responses received from 5,594, or 66.6 percent.
Meanwhile, the diffusion index of sentiment on the country’s current economic situation among so-called economy watchers fell 2.0 points from the previous month to 44.6, according to the office.
The office downgraded its assessment of the index for the first time in 15 months, saying it suggests that “weakness is seen” in the economy, compared with its previous view that the economy is “recovering moderately” in January.
The diffusion index is based on whether respondents believe economic conditions have improved or worsened over the past three months. A reading of 50 indicates that those polled generally believe economic conditions are flat.
The index stayed below the 50 mark for the seventh straight month.
A department store clerk from the Hokuriku region on the Sea of Japan coast said some customers “are refraining from buying items they don’t need urgently amid slumping stock prices.”
As for future prospects, the index for the direction of economic conditions in the coming months fell 1.3 points from the previous month to 48.2.
The Cabinet Office said it cut its assessment due to negative impact of fluctuations in financial and capital markets.
In the survey, the office polled 2,050 workers across the nation from Feb. 25 to 29, of whom 1,853, or 90.4 percent, responded.
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