A Japanese government survey has found that workers are feeling less optimistic about the economy. The index has now fallen for a third straight month, as higher prices and utility bills weigh on sentiment.

The Cabinet Office's Economy Watchers Survey asks more than 2,000 workers from a range of industries to compare economic conditions with those from three months earlier.

The January index stood at 48.5, down 0.2 points from December.

A department store worker is quoted as saying customers are becoming more concerned about their budgets and are cutting down on spending.

A manufacturer pointed to two hikes in the prices of material goods over the past year, including one of more than 40 percent, saying it was not easy to pass such increases on to consumers.

But the Cabinet Office maintains that the economy is showing signs of "rebounding".

The index for the outlook 2 to 3 months ahead improved for a second month. It now stands at 49.3, up 2.5 points from the previous month.