Consumer Prices Rise in Japan, Suggesting Stronger Growth

TOKYO — Japan’s economy is gaining momentum, data for October showed, with consumer prices excluding food and energy rising 0.3 percent from a year earlier. It was the biggest gain since 1998, but household spending remained tepid as incomes slipped from the same month a year before.

The various indicators released on Friday suggested that the very loose monetary policy and stimulus strategy of Prime Minister Shinzo Abe are helping end Japan’s long bout of deflation.

Industrial output rose 0.5 percent in October, the second monthly advance, driven by increases in the production of machinery used to make computer chips and other industrial products, plastics and cellphones.

The government reported that the core consumer price index, excluding food costs, rose 0.9 percent from the year before. Including both food and energy, prices rose 1.1 percent.

Japan’s jobless rate remained flat in October, though the number of jobs available rose slightly.

Further improvement is expected in November, aided by strength in housing construction and exports.

“Business conditions in the Japanese manufacturing economy improved for the ninth consecutive month and at a rapid pace in November, driven for the most part by an expansion of both foreign and domestic demand,” said Claudia Tillbrooke, an economist at Markit, who compiles its purchasing manager’s index for Japan. That index rose to 55.1 in November, from 54.2 in October. A reading above 50 suggests expansion.

The government and central bank have set a target for attaining a 2 percent inflation rate within two years. So far, economists say, most of the increase in prices has come from a weakening in the Japanese yen, which erodes consumer spending power and increases costs in yen terms for imports of fuel, food and industrial components.

Overall household spending, which accounts for nearly two-thirds of Japan’s economic activity, rose 0.9 percent in October. Excluding housing costs, spending fell 1.5 percent from the month before and 0.3 percent from September. Workers’ incomes fell an average of 1.3 percent in October.