| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.8% | 0.8% to 1.0% | 1.1% | -1.1% | -1.3% |
| Year over Year | 3.2% | 1.4% to 3.6% | 3.8% | 2.6% | 2.5% |
Highlights
Japanese retail sales posted the 10th straight year-over-year increase in December, with the pace of increase accelerating from November but slowing from over 4 percent gains seen from August to October, as some people remained cautious about stepping out amid another spike in Covid infections, data released Tuesday by the Ministry of Economy, Trade and Industry showed.
Sales rebounded on the month as colder weather boosted demand for winter clothing and heating oil.
At the start of 2023, credit card records showed personal expenditures on both goods and services had been improving in recent weeks. More people traveled during the year-end and New Year holidays without strict public health restrictions for the first time in three years, pushing up transportation by air and train close to its pre-pandemic levels. Some people are still cautious about holding parties but spending on eating out in general has recovered to pre-pandemic levels.
The monthly Economy Watchers Survey, which was conducted by the Cabinet Office from Dec. 25 to Dec. 31 and released on Jan. 12, indicated that confidence was slow to recover. The numbers of Covid infections and deaths are surging again in Japan's eighth wave of the pandemic.
The Econoday Consensus Divergence Index stood at plus 19, above zero, which indicates the Japanese economy is performing better than expected after underperforming recently and outperforming with a wide margin last year. Excluding the impact of inflation, the index was at plus 28.
Retail sales rose a preliminary 3.8 percent on the year in December for the 10th straight year-over-year rise after rising 2.5 percent (revised from 2.6 percent) in November, 4.4 percent in October and 4.8 percent in September. The increase was higher than the median economist forecast of a 3.2 percent rise (forecasts ranged from 1.4 percent to 3.6 percent gains).
After the initial Omicron variant storm in February 2022, the government eased public health restrictions in March and has continued reopening the economy. It lifted strict its Covid border control in October, leading to a pickup in spending by visitors from other countries.
Sales of automobiles fell 0.5 percent in December after rising 6.1 percent in November, 12.2 percent in October and 10.2 percent in September, which was the first year-on-year rise in 13 months, and falling 6.3 percent in August and posting double-digit percentage drops earlier.
General merchandise sales at department stores and supermarkets marked the 10th straight year-on-year gain, up 3.9 percent in December, following increases of 2.9 percent in November, 6.6 percent in October and 8.8 percent in September. Sales of apparel and accessories rebounded a modest 1.0 percent after falling 8.8 percent in November, rising 4.6 percent in October and dipping 2.3 percent in September, which was the first drop in three months.
Sales of fuels also rebounded 3.2 percent on the year in December amid freezing temperatures across the country and record snowfall in some regions, after falling 2.6 percent in November and rising 1.6 percent in October and 7.5 percent in September. The pace of increase had slowed from a recent peak of 28.9 percent in November 2021. The government is also trying to cap retail gasoline price markups by providing subsidies to refineries.
Demand for medicine and cosmetics remained strong, up a sharp 16.0 percent in December for the 20th straight increase, after rising 12.1 percent in November. Sales of machinery and equipment (largely consumer electronics) fell 3.0 percent after decreases of 2.9 percent in November and 1.0 percent in October and a 3.0 percent gain in September, which was the first rise in three months.
On the month, retail sales rose 1.1 percent on a seasonally adjusted basis in December after marking their first drop in five months in November, down 1.3 percent (revised down from a 1.1 percent drop), and rising 0.3 percent in October and surging 1.5 percent in September. The latest figure was slightly firmer than the median forecast of a 0.8 percent gain (forecasts ranged from 0.8 percent to 1.0 percent increases).
The ministry maintained its assessment, saying retail sales are"picking up." In September, it upgraded its view from the previous statement that sales were"picking up gradually." It noted that the three-month moving average in seasonally adjusted retail sales edged up 0.1 percent in December for a fifth straight gain after rising 0.1 percent the previous month.
Sales rebounded on the month as colder weather boosted demand for winter clothing and heating oil.
At the start of 2023, credit card records showed personal expenditures on both goods and services had been improving in recent weeks. More people traveled during the year-end and New Year holidays without strict public health restrictions for the first time in three years, pushing up transportation by air and train close to its pre-pandemic levels. Some people are still cautious about holding parties but spending on eating out in general has recovered to pre-pandemic levels.
The monthly Economy Watchers Survey, which was conducted by the Cabinet Office from Dec. 25 to Dec. 31 and released on Jan. 12, indicated that confidence was slow to recover. The numbers of Covid infections and deaths are surging again in Japan's eighth wave of the pandemic.
The Econoday Consensus Divergence Index stood at plus 19, above zero, which indicates the Japanese economy is performing better than expected after underperforming recently and outperforming with a wide margin last year. Excluding the impact of inflation, the index was at plus 28.
Retail sales rose a preliminary 3.8 percent on the year in December for the 10th straight year-over-year rise after rising 2.5 percent (revised from 2.6 percent) in November, 4.4 percent in October and 4.8 percent in September. The increase was higher than the median economist forecast of a 3.2 percent rise (forecasts ranged from 1.4 percent to 3.6 percent gains).
After the initial Omicron variant storm in February 2022, the government eased public health restrictions in March and has continued reopening the economy. It lifted strict its Covid border control in October, leading to a pickup in spending by visitors from other countries.
Sales of automobiles fell 0.5 percent in December after rising 6.1 percent in November, 12.2 percent in October and 10.2 percent in September, which was the first year-on-year rise in 13 months, and falling 6.3 percent in August and posting double-digit percentage drops earlier.
General merchandise sales at department stores and supermarkets marked the 10th straight year-on-year gain, up 3.9 percent in December, following increases of 2.9 percent in November, 6.6 percent in October and 8.8 percent in September. Sales of apparel and accessories rebounded a modest 1.0 percent after falling 8.8 percent in November, rising 4.6 percent in October and dipping 2.3 percent in September, which was the first drop in three months.
Sales of fuels also rebounded 3.2 percent on the year in December amid freezing temperatures across the country and record snowfall in some regions, after falling 2.6 percent in November and rising 1.6 percent in October and 7.5 percent in September. The pace of increase had slowed from a recent peak of 28.9 percent in November 2021. The government is also trying to cap retail gasoline price markups by providing subsidies to refineries.
Demand for medicine and cosmetics remained strong, up a sharp 16.0 percent in December for the 20th straight increase, after rising 12.1 percent in November. Sales of machinery and equipment (largely consumer electronics) fell 3.0 percent after decreases of 2.9 percent in November and 1.0 percent in October and a 3.0 percent gain in September, which was the first rise in three months.
On the month, retail sales rose 1.1 percent on a seasonally adjusted basis in December after marking their first drop in five months in November, down 1.3 percent (revised down from a 1.1 percent drop), and rising 0.3 percent in October and surging 1.5 percent in September. The latest figure was slightly firmer than the median forecast of a 0.8 percent gain (forecasts ranged from 0.8 percent to 1.0 percent increases).
The ministry maintained its assessment, saying retail sales are"picking up." In September, it upgraded its view from the previous statement that sales were"picking up gradually." It noted that the three-month moving average in seasonally adjusted retail sales edged up 0.1 percent in December for a fifth straight gain after rising 0.1 percent the previous month.
Market Consensus Before Announcement
Retail sales in Japan are expected to have gained 3.2 percent on year in December, with the pace of increase slowing from over 4 percent gains seen from August to October as fuel prices have eased and some people were cautious about stepping out amid another spike in Covid infections. On the month, retail sales are seen up 0.8 percent after marking their first drop in five months in November, down 1.3 percent (revised down from a 1.1 percent drop) as colder weather propped up demand for winter clothing.
Definition
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.
Description
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.
