Higher gasoline prices and food costs have eroded the spending power of Japanese consumers and sent them to their most pessimistic level ever, according to records that have been kept for the past 26 years.
The sentiment index dropped to 32.6 last month from 33.9 in May, the Cabinet Office said Friday, the lowest mark since the government began compiling the figures in 1982.
Higher prices are crimping profits, making it difficult for companies to raise wages and clouding the outlook for consumers in the world's second-largest economy. Personal spending, which accounts for more than half of gross domestic product, is dwindling and may have caused the economy to contract in the last quarter.