TOKYO, June 8 (Xinhua) -- Sentiment in Japan's service sector dropped in May as workers in the retail sector saw a drop in spending in the recording period, a Cabinet Office survey showed on Friday.
The monthly Economy Watchers survey's diffusion index, in which a score of more than 50 means people view current economic conditions in a positive light, fell 1.9 points to 47.1.
The Cabinet Office said that of those surveyed, some in the retail sector had experienced a lack of domestic consumer spending, while sales during the Golden Week holidays by visitors here also came in below par, the office said.
As a result of the reading, the Cabinet Office downgraded its assessment of business confidence here, saying it "continues to be on a moderate recovery trend but appears to be in a temporary lull."
The Cabinet Office's assessment for May marks the first downgrade in service sector sentiment since January.
The Cabinet Office also said that conditions in the service sector would remain pressured looking ahead, with the sentiment index for economic conditions in the coming months falling 0.9 points from April to 49.2.
This may be connected to U.S. protectionist trade policies such as new tariffs on steel and aluminum imports and tax on automobiles, which could hurt businesses here, a spokesman for the government was quoted as saying on the matter.
The Economy Watchers Survey asks business-cycle sensitive workers their thoughts on existing and future economic conditions to provide the government with a detailed picture of economic trends in Japan.
Segments of the economy surveyed include sectors such as retail, restaurant service, and taxi driving and the monthly report serves as both a consumer confidence indicator and a leading indicator for the rest of the economy.
The decline in May was due to fewer people saying things were getting "better" or "slightly better" and more people seeing conditions as being either unchanged or "worse."
The survey was conducted between May 25 and 31, and polled 2,050 workers across Japan.