Household spending fell 0.7 percent in March from a year earlier to mark the second straight month of decline, underscoring the view the economy suffered a temporary lull in the first quarter as bad weather hurt consumption.
Income slid 3.8 percent in March, dropping for the third straight month in a sign firms remain wary of raising pay despite reaping record profits from robust global demand.
Weak consumption would be a headache for the Bank of Japan, which hopes companies will pass on rising costs to households and help drive up inflation to its 2 percent target.
Household spending slid 0.1 percent in March from February, according to government data.
“There are some weaknesses in the pickup in household spending,” a government official said Tuesday.
The economy has grown for eight straight quarters through the end of 2017, the longest continuous expansion since the 1980s.
But core consumer inflation stood at 0.9 percent in March from a year earlier, well below the BOJ’s target, as slow wage growth keeps consumers from increasing their spending.
Economic growth is expected to show annualized rate of 0.5 percent in the first quarter but is seen likely to regain some momentum over the course of the year, a Reuters poll showed.