JP: Retail Sales

May 29, 2017 06:50 CDT

Consensus Actual Previous
Year over Year 2.3% 3.2% 2.1%

Retail sales in Japan grew by 3.2 percent in April, accelerating from an increase of 2.1 percent in March and exceeding the consensus forecast for an increase of 2.3 percent. This is the sixth consecutive year-on-year increase in retail sales and the strongest since early 2015.

Stronger headline growth in retail sales was largely driven by food and beverage sales, up 1.5 percent on the year in April compared with an increase of 0.2 percent in March. Year-on-year growth in apparel sales also strengthened from a drop of 4.3 percent to an increase of 6.0 percent. This was party offset by a smaller year-on-year increase in fuel sales, up 11.9 percent in April compared with 15.0 percent in March, with growth in auto sales also moderating from 8.6 percent to 6.0 percent.

Solid growth in the retail sales data contrasts with continued weakness in official household spending data, also released today. Household spending fell 0.9 percent on the year in nominal terms and 1.4 percent on the year in real terms in April.

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.