JP: Retail Sales

September 28, 2016 06:50 CDT

Consensus Actual Previous
Year over Year -1.8% -2.1% -0.2%

August retail sales were down a greater than anticipated 2.1 percent from a year ago. It was the sixth consecutive drop. The six straight months of contraction is the longest run of declines since 2008-09, when retail trade went 16 months without a gain.

Most subcategories declined with the exception of autos which were up 1.8 percent and medicine & toiletries stores which were up 2.5 percent. However, machinery & equipment tumbled 9.4 percent after gaining 0.7 percent in July. General merchandise retreated 6.4 percent and was down for a sixth month. Fuel was down 7.7 percent from a year ago. Fabrics, apparel & accessories were down 2.1 percent after increasing 1.3 percent last time.

Consumer spending continues to be weak. Next up is household spending which will be released tomorrow.

Retail Sales measure the total receipts at stores that sell durable and nondurable goods. The data are part of the Preliminary Report on the Current Survey of Commerce.

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.