Japan's household spending in July fell 5.0 percent from a year earlier, the biggest drop in more than two years, government data showed Tuesday, as higher prices hit consumption.
Households of two or more people spent an average of 281,736 yen ($1,900), declining for the fifth consecutive month and marking the sharpest fall since a 6.5 percent plunge in February 2021, the Ministry of Internal Affairs and Communications said.
By category, spending on education decreased 19.8 percent as families curtailed outlays for cram schools in the face of soaring costs, a ministry official said.
Household expenditures declined 18.6 percent as spending on renovations fell as people spent less time at home following the easing of COVID-19 restrictions, the official said.
Food expenditure, accounting for around one-third of household spending, declined 2.8 percent, amid rising prices for fish and meat.
Spending on medical supplies such as face masks and thermometers fell after the legal status of COVID-19 was downgraded to the same category as seasonal flu.
"The impact of rising prices seems to be taking effect gradually," the official said.
Meanwhile, spending on accommodation and package tours increased 10.6 percent and 7.7 percent, respectively, as people traveled during their summer vacations after the removal of coronavirus restrictions.
The data is a key indicator of private consumption, which accounts for more than half of the country's gross domestic product.
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