| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | -0.2% | -0.8% to 0.2% | -0.1% | 0.1% | 0.2% |
| Year over Year | 5.7% | 5.1% to 6.2% | 5.8% | 7.0% | 7.1% |
Highlights
Japanese retail sales posted a solid 5.8 percent rise on the year in September thanks to solid demand for automobiles, as largely expected, but the pace of increase decelerated from August and sales dipped a slight 0.1 percent on the month as the lingering heat wave dented demand for autumn clothing, data released Tuesday by the Ministry of Economy, Trade and Industry showed.
Sales values have been supported by elevated prices for food, beverages and fuels. The number of visitors from other countries continued to show a sharp increase since Japan's Covid border control was widely eased in May and the yen remains weak, driving department store sales higher.
Econoday's Relative Performance Index stood at plus 18, above zero, which indicates the Japanese economy is performing better than expected after outperforming with a wider margin recently. Excluding the impact of inflation, the RPI was at plus 6.
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 5.8 percent on the year in September for the 19th straight year-over-year rise after rising 7.1 percent (revised up from 7.0 percent) in August, 7.0 percent in July and 5.6 percent in June. The increase was just above the median economist forecast of a +5.7 percent rise (forecasts ranged from 5.1 percent to 6.2 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 dipped 0.1 percent on a seasonally adjusted basis in September for the first drop in three months following a 0.2 percent rise (revised up from 0.1 percent), a 2.2 percent jump in July and a 0.6 percent dip in June. It was slightly firmer than the median forecast of a 0.2 percent decrease (forecasts ranged from a 0.8 percent drop to a 0.2 percent rise).
The ministry maintained its assessment, saying retail sales are"on an uptrend." The three-month moving average in seasonally adjusted retail sales rose 0.7 percent in September after rising 0.6 percent the previous month.
Sales of automobiles rose 7.0 percent on year in September for the 13th straight gain after rising 8.8 percent in August and marking double-digit percentage gains for six months through 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 12th straight rise, up 7.0 percent, after rising 9.0 percent the previous month. Sales prices have been marked up to reflect high import costs seen earlier.
General merchandise sales at department stores and supermarkets marked the 25th straight year-over-year gain, up 5.6 percent in September, after rising 7.2 percent in August. Sales of apparel and accessories recorded the drop in three months, down 6.1 percent, after rising 0.4 percent the previous month.
Sales of fuels rose 7.5 percent on the year in September for the third consecutive rise after rising 8.6 percent in August and marking their first rise in five months in July, up 3.2 percent. 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 extended the program through yearned as retail gasoline prices hit record highs from late August through early September.
Demand for medicine and cosmetics remained solid, up 4.8 percent in September, after a 3.8 percent gain in August. Sales of machinery and equipment (largely consumer electronics) rose 4.7 percent in September for the third increase in a row after rising 5.7 percent in August.
Sales values have been supported by elevated prices for food, beverages and fuels. The number of visitors from other countries continued to show a sharp increase since Japan's Covid border control was widely eased in May and the yen remains weak, driving department store sales higher.
Econoday's Relative Performance Index stood at plus 18, above zero, which indicates the Japanese economy is performing better than expected after outperforming with a wider margin recently. Excluding the impact of inflation, the RPI was at plus 6.
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 5.8 percent on the year in September for the 19th straight year-over-year rise after rising 7.1 percent (revised up from 7.0 percent) in August, 7.0 percent in July and 5.6 percent in June. The increase was just above the median economist forecast of a +5.7 percent rise (forecasts ranged from 5.1 percent to 6.2 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 dipped 0.1 percent on a seasonally adjusted basis in September for the first drop in three months following a 0.2 percent rise (revised up from 0.1 percent), a 2.2 percent jump in July and a 0.6 percent dip in June. It was slightly firmer than the median forecast of a 0.2 percent decrease (forecasts ranged from a 0.8 percent drop to a 0.2 percent rise).
The ministry maintained its assessment, saying retail sales are"on an uptrend." The three-month moving average in seasonally adjusted retail sales rose 0.7 percent in September after rising 0.6 percent the previous month.
Sales of automobiles rose 7.0 percent on year in September for the 13th straight gain after rising 8.8 percent in August and marking double-digit percentage gains for six months through 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 12th straight rise, up 7.0 percent, after rising 9.0 percent the previous month. Sales prices have been marked up to reflect high import costs seen earlier.
General merchandise sales at department stores and supermarkets marked the 25th straight year-over-year gain, up 5.6 percent in September, after rising 7.2 percent in August. Sales of apparel and accessories recorded the drop in three months, down 6.1 percent, after rising 0.4 percent the previous month.
Sales of fuels rose 7.5 percent on the year in September for the third consecutive rise after rising 8.6 percent in August and marking their first rise in five months in July, up 3.2 percent. 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 extended the program through yearned as retail gasoline prices hit record highs from late August through early September.
Demand for medicine and cosmetics remained solid, up 4.8 percent in September, after a 3.8 percent gain in August. Sales of machinery and equipment (largely consumer electronics) rose 4.7 percent in September for the third increase in a row after rising 5.7 percent in August.
Market Consensus Before Announcement
Japanese retail sales are forecast to have risen 5.7 percent on year in September, slowing from a revised 7.1 percent increase in August, as the heat wave, which had boosted demand for summer clothing, lingered to spoil the appetite for autumn goods. New vehicle sales were solid but slower and fuel prices also eased after national average regular gasoline prices hit record highs from late August to early September. Retail sales are seen up down 0.2 percent on the month after rising a revised 0.2 percent and surging 2.2 percent jump in July.
Overall retail sales values have been propped up by elevated prices for food and beverages. The number of visitors from other countries continued to show a sharp increase since Japan's Covid border control was widely eased in May and the yen remains weak, driving department store sales higher.
Overall retail sales values have been propped up by elevated prices for food and beverages. The number of visitors from other countries continued to show a sharp increase since Japan's Covid border control was widely eased in May and the yen remains weak, driving department store sales higher.
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.
