Tokyo, April 16 (Bloomberg) -- Department store sales in Tokyo fell for a thirdstraight month in March as people spent less on clothing and furniture. Spending at department stores, including Tokyo's two biggest, Takashimaya Co.and Mitsukoshi Ltd., dropped 0.6 percent last month from a year earlier to 189.8billion yen ($1.52 billion), the Japan Department Store Association said. Department store operators face another tough year with little improvement inpersonal incomes as companies cut production in response to falling overseassales. They are also losing market share to discounters and specialty stores. ``With the economy slowing down, especially production going down lately, that'sbeen having negative effects on incomes and consumption overall,'' said Minako Iida,an economist at Deutsche Securities Ltd. before the figures were released.``Spending is expected to stagnate for some time.'' Industrial production rose 0.4 percent in February from the previous month,seasonally adjusted, falling short of the government's forecast of a 2.7 percentincrease. Real wages dropped 0.2 percent in the same month from a year earlier. Sales of clothing fell 1.2 percent, while furniture and other household goods fell 6.2percent, the association said. The impact of falling overseas demand and production have been cited by thegovernment and the Bank of Japan as the main reason for downgrading theirassessment of the economy in recent months. Last Friday, the government cut its economic assessment for a third month, givingits worst verdict of the nation's outlook in more than five years as a drop in exports isleading to cuts in production. The central bank also downgraded its assessmenttoday.