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Family spending in Japan has plummeted at a record rate as measures to curb the spread of the coronavirus kept people at home.
Government figures show that household spending fell 16.2% in May from the previous year.
The worse-than-expected drop was the fastest rate of decline since comparable data began in 2001.
The figures serve as another indication of how strong the pandemic has been in the world’s third largest economy.
The data showed big drops in spending on hotels, transportation and restaurants. Goods that saw an increase in spending included meat, alcohol, and face masks.
Economists expect the spending recovery to be slow and fragile as consumers are reluctant to loosen handbags, even after a nationwide state of emergency was lifted in May.
Prospects for household spending in the coming months also remain weak as job losses are expected to increase.
Meanwhile, Japan’s real wages fell at the fastest rate in nearly five years, in a sign of how the virus is affecting the labor market.
Real wages, an indicator of household purchasing power, fell 2.1% in May from a year earlier, the fastest rate of decline since June 2015.
“The impact of the coronavirus led to a reduction in overtime pay that caused real wages to drop a lot,” said a labor ministry official.
Overtime pay, which is considered a key measure of the strength of business activity, fell 25.8% from the previous year.
It was the biggest drop since comparable data was available in January 2013, and marked the ninth consecutive monthly decline.
Both data sets highlight the main challenges facing the government and central bank of Japan as the country prepares for its deepest recession since the end of World War II.
Economists expect a contraction of more than 20% this year due to the impact of closure measures in response to the pandemic.
The Japanese economy is also feeling pressure from the aftermath of the US-China trade war and the increase in sales taxes that went into effect in early October.
Policymakers are now facing increasing pressure to step up measures to restore business and consumer confidence.
Earlier this month, official figures confirmed that Japan had fallen into recession for the first time in four and a half years, following a 7.2% contraction between October and December.
