JP: Retail Sales

Thu Mar 26 18:50:00 CDT 2015

Consensus Actual Previous
Year over Year -0.7% -1.8% -2.0%

Retail sales were down for a second month in February. Sales were down 1.8 percent after dropping 2.0 percent in January as consumption continues to lag since the sales tax increase in April. Motor vehicle sales dropped for a fifth month, this time by 2.7 percent. Machinery and equipment dropped 9.9 percent. This category has now retreated for 11 months. Fuel was down for a fifth month, declining 17.8 percent in January. On the positive side, food & beverages were up 2.8 percent on the year and apparel added 1.9 percent.

Weak consumption combined with downward pressure from energy prices was apparent in both the household spending survey and in this report. Weak demand is also dragging down consumer prices making it harder for the BoJ to attain its 2 percent inflation goal.

Retail sales measure the total receipts at stores that sell durable and nondurable goods.

Another way to look at consumer spending in addition to the household spending survey is through the retail sales report. This report gives the total value of goods and services sold each month at retail outlets. The preferred number is the change from the previous year. The report serves as a direct gauge of consumption and consumer confidence. Consumer spending is one of the most important leading indicators for the Japanese economy. Increasing sales signal consumer confidence and economic growth, but higher consumption also leads to inflationary pressures.