JP: Retail Sales

October 30, 2016 06:50 CDT

Consensus Actual Previous
Year over Year -1.8% -1.9% -2.1%

Retail sales in Japan fell by 1.9 percent year-on-year in September, close to the consensus forecast for a fall of 1.8 percent. Sales fell by 2.1 percent year-on-year in August and have now been in negative territory for seven consecutive months, the longest period of contraction since 2008-09.

These falls in retail sales have largely been driven by the same factors weighing on Japan's consumer price index, namely weaker energy and food prices. Retail sales of fuel fell by 6.1 percent year-on-year in September, compared with a fall of 7.9 percent in August, while food and beverage sales fell by 0.3 percent, compared with a fall of 0.4 percent in August. Apparel sales also recorded a large year-on-year fall in September, offsetting higher year-on-year sales for automobiles and consumer electronics.

In month-on-month terms, retail sales were unchanged in September on a seasonally-adjusted basis, after a fall of 1.2 percent in August and an increase of 1.5 percent in July. These monthly results imply a quarter-on-quarter increase of 0.9 percent for the three months to September, up from an increase of 0.1 percent in the three months to June.

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.