Japan's real household spending posted its ninth straight drop on the year in November, down a larger-than-expected 2.9 percent, after a 2.5 percent dip in October, as high costs for food and other daily necessities promoted many to remain frugal and partly because home maintenance and repairs as well as vehicle purchases -- both volatile factors -- declined after rising the previous month, data released Tuesday by the Ministry of Internal Affairs and Communications showed.

On the month, expenditures slumped 1.0 percent, much weaker than expected, after dipping 0.1 percent in October and rising 0.3 percent in September. Lower temperatures generally supported demand for winter clothing and heaters while pent-up demand for eating out and traveling had already slowed down.

The widespread move among consumers to switch to discount mobile phone plans remains in place while the pandemic-era necessity to simplify weddings and funerals continued to push down the costs for ceremonies.

The core measure of real average household spending (excluding housing, motor vehicles and remittance), a key indicator used in GDP calculation, fell 0.9 percent on the year in November, much smaller than the 2.9 percent drop in overall spending, after falling 3.6 percent in October. The ministry's overall assessment on household spending is unchanged at flat.

The average real income of households with salaried workers posted the 14th straight year-over-year drop, down 4.7 percent in November (down 1.6 in nominal terms) after falling 5.2 percent October (down a nominal 1.5 percent).

Econoday's Relative Performance Index stood at plus 18, above zero, which indicates the Japanese economy is performing better than expected after outperforming with a wider margin recently. Excluding the impact of inflation, the RPI was at plus 25.

Both the government and the Bank of Japan have been providing stimulus to help the economy recover from the pandemic-caused slump. Nominal wages are expected to grow at a fast pace in the current fiscal year amid labor shortages but real wages remain below year-earlier levels.

Japan's real household spending is forecast to post its ninth straight drop on the year in November, down 2.3 percent, after falling 2.5 percent in October and 2.8 percent in September as consumers remain frugal amid elevated costs for food and other daily necessities. On the month, expenditures are forecast to rebound 0.3 percent after edging down 0.1 percent in October and rising 0.3 percent in September. Protracted warm weather that had dampened demand for autumn goods in the previous two months gave way to lower temperatures in the second half of November, prompting purchases of winter clothing and heaters.

Household Spending is an important gauge of personal consumption, which accounts for roughly 55 percent of Japan's gross domestic product. It is part of the monthly Family Income and Spending Report.

The report looks at spending of households and gives a picture of consumer spending. Increases in household spending are favorable for the Japanese economy because high consumer spending generally leads to higher levels of economic growth. Higher spending is also a sign of consumer optimism, as households confident in their future outlook will spend more. The preferred number is the change from the previous year. The data are part of the family income and expenditure survey which is released at the same time as the employment and unemployment data.