Japan looked more likely than ever to be headed for its fourth recession in a decade as a raft of weak data underscored the parlous state of the economy.
Government data showed unemployment stuck at a record high of 5% in August, restraining household spending and helping to keep consumer prices on a two-year downward trend.
A modest bounce in industrial output - the first rise in six months - was seen as little more than a blip as companies are expected to cut back on inventories.
As the unemployment rate remained pinned at record high for the second consecutive month, average spending by households of wage earners, a key gauge of consumer spending, fell a real 0.8% in August from a year earlier, the fifth straight month of decline.
The weak consumer demand also showed up in nationwide consumer prices, which fell for a 23rd month in a row, dropping by 0.9% in August from a year earlier.
Japan's gross domestic product shrank 0.8% in April-June from the previous quarter and now seems certain to shrink again in the current quarter. The two consecutive quarters of negative economic growth would fit the classic definition of a recession.
