Merchants in November became the most pessimistic they've been in four years as stagnant wages and record gasoline prices prompt consumers to pare spending.
The Economy Watchers index, a survey of barbers, shopkeepers and others who deal with consumers, fell for an eighth month to 38.8 from 41.5 in October, the Cabinet Office said Monday. A number less than 50 means pessimists outnumber optimists.
Waning consumer spending, which accounts for more than half of the economy, makes Japan more reliant on overseas markets to drive its expansion. Surging costs of raw materials caused profits to decline for the first time in five years last quarter, dampening hopes companies will increase pay and help consumers drive growth.
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