By Kaori Kaneko
TOKYO (Reuters) - Japan's factory output is expected to have risen for a second straight month in August, but at a slower pace than in July, while household spending likely fell for a fifth straight month, reflecting the effects of April's sales tax hik, , according to a Reuter's poll.
Industrial production probably rose 0.2 percent in August from the previous month, after growing by a revised 0.4 percent in July, the survey of 25 analysts showed.
In June, factory output dropped 3.4 percent - the biggest fall since the March 2011 earthquake and tsunami disaster.
A SMBC Nikko Securities economist said factory output will remain sluggish as both domestic and foreign demand is stagnant.
"Even if demand recovers, manufacturers will prioritise drawing down inventories and they will be cautious about boosting the output," the economist said in response to the survey
The government will release August output data at 8:50 a.m. on Sept. 30 (12.50 a.m. BST Sept. 29), along with manufacturers' production forecasts for September and October.
August household spending data will be scrutinised for any sign that consumers are getting over the April sales tax hike to 8 percent from 5 percent.
The poll showed household spending is expected to have fallen 3.8 percent in August from a year ago, dropping for a fifth straight month. That would still be better than the 5.9 percent drop suffered in July when the higher tax and bad weather combined to deter shoppers.
"Household spending will likely move sideways. For the outlook, it is expected to recover gradually on an improving employment and wage situation," an economist at Dai-ichi Life Research Institute said.
Retail sales, another measure of consumer spending, are forecast to rise for a second straight month in August, but the pace of growth probably eased from July, according to the poll, which showed retail sales edging up an annual 0.3 percent in August after a revised 0.6 percent gain in July.
Jobs-related data will probably show the unemployment rate steady at 3.8 percent in August, unchanged from July, the poll showed. The jobs-to-applicants ratio is forecast to stay at 1.10 last month, unchanged from July and June, and the highest level in 22 years.
The government will release jobs and household spending data at 8:30 a.m. on Sept. 30 (2330 GMT on Sept. 29) and retail sales at 8:50 a.m. on the same day.
Japan's economy shrank 7.1 percent in April-June, hit by the sales tax increase, suffering its biggest contraction since the 2009 global financial crisis. Prime Minister Shinzo Abe is set to make a final decision by the end of this year on whether to proceed with a second sales tax increase.
(Editing by Simon Cameron-Moore)