| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.4% | -2.5% to 0.9% | 0.1% | 2.1% | 2.2% |
| Year over Year | 6.9% | 4.2% to 9.8% | 7.0% | 6.8% | 7.0% |
Highlights
Japanese retail sales maintained high growth on the year in August as the lingering heat wave boosted demand for summer clothing and other seasonal goods, new car sales rose on improved supply and record high gasoline prices pushed up fuel costs, data released Friday by the Ministry of Economy, Trade and Industry showed.
Sales values are also underpinned by elevated prices for food and beverages. The number of visitors from other countries continued to show a sharp increase after Japan's Covid border control was widely eased in May, driving department store sales higher.
Econoday's Relative Performance Index stood at minus 16, below zero, which indicates the Japanese economy is performing worse than expected after underperforming with a wider margin recently. Excluding the impact of inflation, the RPI was at minus 22.
Japanese policymakers believe the economy still needs continued monetary and fiscal policy support to achieve sustainable wage growth and stable 2 percent inflation.
Retail sales rose a preliminary 7.0 percent on the year in August for the 18th straight year-over-year rise after rising 7.0 percent (revised up from 6.8 percent) in July, 5.6 percent in June, 5.8 percent in May and 5.1 percent in April. The increase was just above the median economist forecast of a 6.9 percent rise (forecasts ranged from 4.2 percent to 9.8 percent gains). The 7.3 percent rise in February remains the highest since the 8.3 percent increase in May 2021.
On the month, retail sales edged up 0.1 percent on a seasonally adjusted basis in August for the second straight rise following a 2.2 percent rise (revised up from 2.1 percent) in July, a 0.6 percent fall in June, a 1.4 percent rise in May and a 1.1 percent fall in April. It was softer than the median forecast of a 0.4 percent increase (forecasts ranged from a 2.5 percent drop to a 0.9 percent rise).
The ministry maintained its assessment after upgrading it for the second straight month in March, saying retail sales are"on an uptrend." The three-month moving average in seasonally adjusted retail sales rose 0.5 percent in August after rising rose 0.9 percent the previous month.
Sales of automobiles rose 9.0 percent on year in August for the 12th straight gain after rising 8.9 percent in July and marking double-digit percentage gains in the previous six months including a 17.7 percent jump in June. Improving supply chains and easing chip shortages have been supporting auto production and shipments.
Sales of food and beverages, a category which has the largest share in retail sales, posted their 11th straight rise, up 9.4 percent, after rising 7.8 percent the previous month as suppliers continued raising sales prices to reflect high import and production costs seen earlier.
General merchandise sales at department stores and supermarkets marked the 24th straight year-over-year gain, up 7.2 percent in August, after rising 6.3 percent in July. Sales of apparel and accessories recorded the second straight increase, up 0.9 percent, after rising 3.2 percent the previous month for the first rise in five months amid hot and humid weather.
Sales of fuels rose 7.9 percent on the year in August for the second consecutive rise after marking their first rise in five months in July, up 3.2 percent, and falling 4.1 percent in June, as the government has scaled back its energy subsidies. Overall energy costs have eased in line with softer markets until recently while the government has been trying to cap retail gasoline price markups by providing subsidies to refineries. The process of phasing out the subsidy program began in June and was scheduled to end in September but officials have decided to extend the program through yearned as gasoline prices have surged in recent weeks.
Demand for medicine and cosmetics remained solid, up 3.9 percent in August, after a 6.5 percent gain in July. Sales of machinery and equipment (largely consumer electronics) rose 5.6 percent in August after 4.0 percent in July for the first year-over-year rise in five months.
Industry data released Monday showed department store sales marked the 18th straight year-over-year rise in August, up 11.8 percent, following increases of 8.6 percent in July, 7.0 percent in June, 6.3 percent in May, 9.6 percent in April, 9.8 percent in March, 20.4 percent in February and 15.1 percent in January. Compared to the pre-pandemic August 2019, sales last month were down 4.2 percent, gradually improvement from sharper drops seen earlier.
The Japan Department Stores Association noted that the adverse effects of typhoons were more than offset by continued solid sales of luxurious brand name products, increased foot traffic during summer holidays and strong demand for summer clothing and other seasonal goods amid the heat wave.
The weak yen and widely relaxed Covid border rules continued pushing up spending by foreign visitors, up 244.4 percent on the year. It was now 24.1 percent above the level seen in August 2019, overcoming the drag from the pandemic, after rising 11.4 percent in July from four years earlier and falling just 0.8 percent in June.
Sales values are also underpinned by elevated prices for food and beverages. The number of visitors from other countries continued to show a sharp increase after Japan's Covid border control was widely eased in May, driving department store sales higher.
Econoday's Relative Performance Index stood at minus 16, below zero, which indicates the Japanese economy is performing worse than expected after underperforming with a wider margin recently. Excluding the impact of inflation, the RPI was at minus 22.
Japanese policymakers believe the economy still needs continued monetary and fiscal policy support to achieve sustainable wage growth and stable 2 percent inflation.
Retail sales rose a preliminary 7.0 percent on the year in August for the 18th straight year-over-year rise after rising 7.0 percent (revised up from 6.8 percent) in July, 5.6 percent in June, 5.8 percent in May and 5.1 percent in April. The increase was just above the median economist forecast of a 6.9 percent rise (forecasts ranged from 4.2 percent to 9.8 percent gains). The 7.3 percent rise in February remains the highest since the 8.3 percent increase in May 2021.
On the month, retail sales edged up 0.1 percent on a seasonally adjusted basis in August for the second straight rise following a 2.2 percent rise (revised up from 2.1 percent) in July, a 0.6 percent fall in June, a 1.4 percent rise in May and a 1.1 percent fall in April. It was softer than the median forecast of a 0.4 percent increase (forecasts ranged from a 2.5 percent drop to a 0.9 percent rise).
The ministry maintained its assessment after upgrading it for the second straight month in March, saying retail sales are"on an uptrend." The three-month moving average in seasonally adjusted retail sales rose 0.5 percent in August after rising rose 0.9 percent the previous month.
Sales of automobiles rose 9.0 percent on year in August for the 12th straight gain after rising 8.9 percent in July and marking double-digit percentage gains in the previous six months including a 17.7 percent jump in June. Improving supply chains and easing chip shortages have been supporting auto production and shipments.
Sales of food and beverages, a category which has the largest share in retail sales, posted their 11th straight rise, up 9.4 percent, after rising 7.8 percent the previous month as suppliers continued raising sales prices to reflect high import and production costs seen earlier.
General merchandise sales at department stores and supermarkets marked the 24th straight year-over-year gain, up 7.2 percent in August, after rising 6.3 percent in July. Sales of apparel and accessories recorded the second straight increase, up 0.9 percent, after rising 3.2 percent the previous month for the first rise in five months amid hot and humid weather.
Sales of fuels rose 7.9 percent on the year in August for the second consecutive rise after marking their first rise in five months in July, up 3.2 percent, and falling 4.1 percent in June, as the government has scaled back its energy subsidies. Overall energy costs have eased in line with softer markets until recently while the government has been trying to cap retail gasoline price markups by providing subsidies to refineries. The process of phasing out the subsidy program began in June and was scheduled to end in September but officials have decided to extend the program through yearned as gasoline prices have surged in recent weeks.
Demand for medicine and cosmetics remained solid, up 3.9 percent in August, after a 6.5 percent gain in July. Sales of machinery and equipment (largely consumer electronics) rose 5.6 percent in August after 4.0 percent in July for the first year-over-year rise in five months.
Industry data released Monday showed department store sales marked the 18th straight year-over-year rise in August, up 11.8 percent, following increases of 8.6 percent in July, 7.0 percent in June, 6.3 percent in May, 9.6 percent in April, 9.8 percent in March, 20.4 percent in February and 15.1 percent in January. Compared to the pre-pandemic August 2019, sales last month were down 4.2 percent, gradually improvement from sharper drops seen earlier.
The Japan Department Stores Association noted that the adverse effects of typhoons were more than offset by continued solid sales of luxurious brand name products, increased foot traffic during summer holidays and strong demand for summer clothing and other seasonal goods amid the heat wave.
The weak yen and widely relaxed Covid border rules continued pushing up spending by foreign visitors, up 244.4 percent on the year. It was now 24.1 percent above the level seen in August 2019, overcoming the drag from the pandemic, after rising 11.4 percent in July from four years earlier and falling just 0.8 percent in June.
Market Consensus Before Announcement
Japanese retail sales are expected to maintain high pace of growth on the year in August, up 6.9 percent, after a revised 7.0 percent rise in July, as the lingering heat wave boosted demand for summer clothing and other seasonal goods, new car sales rose on improved supply and record high gasoline prices pushed up fuel costs. Sales values are also underpinned by elevated prices for food and beverages. The number of visitors from other countries continued to show a sharp increase after Japan's Covid border control was widely eased in May, driving department store sales higher. Sales are seen up just 0.4 percent on the month after a revised 2.2 percent jump in July.
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.
