TOKYO, Sept. 4 (Xinhua) -- Japan's household spending dropped 3.6 percent in inflation-adjusted real terms in July from a year earlier, the eighth straight monthly decline, government data showed Friday.

Photo taken on Feb. 26, 2025 shows Gassho-zukuri houses covered in snow in Shirakawa-go, Japan. (Photo: Xinhua)

The reading marked the steepest fall since a 6.3 percent slide in January 2024, the Ministry of Internal Affairs and Communications said.

Households of two or more people spent an average of 301,245 yen (around 1,926 U.S. dollars) in the reporting month.

By category, food and beverage spending declined 1.3 percent as inflation weighed on purchases, while cooler weather than the previous year also curbed beverage demand.

Consumers gravitated toward cheaper prepared food, a shift a ministry official described as a "trend towards tighter spending."

Outlays for energy and water bills tumbled 9.2 percent, a drop an official attributed largely to reduced air-conditioning use amid lower temperatures than the same month last year.

The household spending data serves as a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

The average monthly income of salaried households of at least two individuals fell by a real 3.8 percent to 689,476 yen, according to the ministry.