TOKYO — Japan’s core inflation rate rose 0.8 percent in October, a slight increase from the month before, while the jobless rate remained steady at a very low 2.8 percent. But lackluster household spending pointed to persisting weakness in the recovery of the world’s third-largest economy.
Inflation excluding volatile food prices and energy was only 0.2 percent, suggesting much of the increase in prices was related to energy costs. Electricity rates jumped 8 percent and the price of kerosene, used to heat many homes, climbed 21 percent.
Overall, inflation remains well below the 2 percent official target set when Japan’s central bank launched an unprecedented barrage of monetary easing seeking to spur growth by pushing prices higher.
Household incomes rose nearly 3 percent in October from a year earlier while spending was flat. Overall wage growth has lagged, and families generally have chosen to hold onto extra cash, while businesses have socked windfall profits away in massive cash piles, or stepped up investments overseas in faster-growing markets.
While the U.S. Federal Reserve is expected to follow through with a long anticipated interest rate increase next week, the Bank of Japan has kept its key policy rate at minus 0.1 percent, and its governor, Haruhiko Kuroda, has said stimulus will continue until inflation reaches about 2 percent.
The pickup in growth in recent months has largely been thanks to revived demand for exports across the region.
Japan is due to announce revised economic growth figures for July-September next week. Earlier it reported the economy expanded at a 1.4 percent annualized rate in the last quarter, the seventh straight quarter of growth.
A survey of manufacturers released Friday showed output gained momentum in November, helped by rising demand from China. The Nikkei Japan Manufacturing Purchasing Managers index, or PMI, rose to 53.6 from 52.8 in October, the largest monthly increase since March 2014.
The PMI measures a range of indicators on a scale up to 100 where levels above 50 signal expansion.