TOKYO (Reuters – Japan’s November household spending increased for the first-time in 4 months, while Tokyo consumer inflation was at 22-months highs in December. A Reuters poll revealed that this is according to Reuters.

Although low coronavirus incidences have helped boost consumption and the wider economy in the third quarter of 2021. However, the spread of Omicron and rising costs of goods has raised concerns regarding Japan’s recovery.

The median estimate by 16 economists at Reuters suggests that household spending rose 1.6% to November, compared to a year before. This would be the first increase since July, following a fall of 0.6% in October.

After a 3.4% increase in October, households are expected to spend 1.2% more month-over-month in November.

Economists at SMBC Nikko Securities stated that “as new COVID-19 case remained low” and they believe stay-at-home (mood), has been easing.

“Goods and restaurant spending increased, and foot traffic increased”

In fact, the emergence of fewer infections in recent quarters is likely to lead to an impressive rebound in world’s third-largest economic sector in the fourth trimester 2021. This follows a more severe-than-expected contraction that occurred in July-September.

A rising incidence of national coronavirus infections is the biggest uncertainty heading into 2019. The more dangerous Omicron variant was already transmitted to the community in December ahead of Japan’s holidays, when many tourists return home to start the new year.

Also, Tuesday’s poll found that Tokyo’s Core Consumer Price Index (CPI), which excludes fresh foods prices but includes energy products, rose 0.5% in December compared to a year ago. This is the fastest increase since February 2020.

Due to the soaring energy costs, consumers inflation was likely to be higher, according Shumpei Fujita (NYSE:) Research and Consulting.

Analysts warn that another round of epidemics and increasing costs may cool consumption and slow the recovery process.

On Jan. 7, the government will publish the Tokyo core CPI and household spending data at 8:30 AM (Jan. 6, 2330 GMT).