| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | -0.3% | -0.6% to 1.4% | -1.6% | -0.1% | 0.4% |
| Year over Year | 5.8% | 4.6% to 7.4% | 4.2% | 5.8% | 6.2% |
Highlights
Japanese retail sales continued to post a solid gain on the year in October, up 4.2 percent, amid smooth deliveries of automobiles, but the pace of increase was slower than forecast and decelerated further from September's revised 6.2 percent rise, data released Thursday by the Ministry of Economy, Trade and Industry showed.
On the month, retail sales slumped a weaker-than-expected 1.6 percent, the first drop in four months, as the lingering heat wave dampened demand for autumn goods
Sales values remained supported by elevated prices for food and beverages while fuel costs eased. 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, shoring up department store sales.
Econoday's Relative Performance Index (RPI) stood at minus 18, below zero, which indicates the Japanese economy is performing worse than expected after underperforming with a wider margin earlier. Excluding the impact of inflation, the RPI was at zero.
Japanese policymakers believe the economy still needs continued monetary and fiscal policy support to achieve sustainable wage growth and stable 2 percent inflation. The economy posted its first contraction in three quarters in July-September, likely pushing the output gap back into negative territory.
Retail sales rose a preliminary 4.2 percent on the year in October for the 20th straight year-over-year rise after rising 6.2 percent in September (first revised up to 6.3 percent from 5.8 percent earlier and then revised again today) and 7.0 percent in August (revised from 7.1 percent), 7.0 percent in July and 5.6 percent in June. The increase was below the median economist forecast of a +5.8 percent rise (forecasts ranged from 4.6 percent to 7.4 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 slumped 1.6 percent on a seasonally adjusted basis in October, following a 0.4 percent rise (revised up from a 0.1 percent drop) in September, a 0.2 percent rise in August, a 2.2 percent jump in July and a 0.6 percent dip in June. It was much weaker than the median forecast of a 0.3 percent decrease (forecasts ranged from a 0.6 percent drop to a 1.4 percent rise).
The ministry maintained its assessment, saying retail sales are"on an uptrend." The three-month moving average in seasonally adjusted retail sales fell 0.4 percent in October after rising 0.9 percent the previous month.
Sales of automobiles rose 8.2 percent on year in October for the 14th straight gain after rising 10.8 percent in September. Improved 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 13th straight rise, up 6.6 percent, after rising 7.1 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 3.5 percent in October, after rising 5.6 percent in September. Sales of apparel and accessories fell 7.2 percent, after falling 5.9 percent the previous month, which was the first drop in three months.
Sales of fuels dipped 0.9 percent on the year in October for the first drop in four months after rising 7.1 percent in September, 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 4.9 percent in October, after a 5.0 percent gain in September. Sales of machinery and equipment (largely consumer electronics) rose 0.9 percent in October for the fourth increase in a row after rising 4.8 percent in September.
On the month, retail sales slumped a weaker-than-expected 1.6 percent, the first drop in four months, as the lingering heat wave dampened demand for autumn goods
Sales values remained supported by elevated prices for food and beverages while fuel costs eased. 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, shoring up department store sales.
Econoday's Relative Performance Index (RPI) stood at minus 18, below zero, which indicates the Japanese economy is performing worse than expected after underperforming with a wider margin earlier. Excluding the impact of inflation, the RPI was at zero.
Japanese policymakers believe the economy still needs continued monetary and fiscal policy support to achieve sustainable wage growth and stable 2 percent inflation. The economy posted its first contraction in three quarters in July-September, likely pushing the output gap back into negative territory.
Retail sales rose a preliminary 4.2 percent on the year in October for the 20th straight year-over-year rise after rising 6.2 percent in September (first revised up to 6.3 percent from 5.8 percent earlier and then revised again today) and 7.0 percent in August (revised from 7.1 percent), 7.0 percent in July and 5.6 percent in June. The increase was below the median economist forecast of a +5.8 percent rise (forecasts ranged from 4.6 percent to 7.4 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 slumped 1.6 percent on a seasonally adjusted basis in October, following a 0.4 percent rise (revised up from a 0.1 percent drop) in September, a 0.2 percent rise in August, a 2.2 percent jump in July and a 0.6 percent dip in June. It was much weaker than the median forecast of a 0.3 percent decrease (forecasts ranged from a 0.6 percent drop to a 1.4 percent rise).
The ministry maintained its assessment, saying retail sales are"on an uptrend." The three-month moving average in seasonally adjusted retail sales fell 0.4 percent in October after rising 0.9 percent the previous month.
Sales of automobiles rose 8.2 percent on year in October for the 14th straight gain after rising 10.8 percent in September. Improved 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 13th straight rise, up 6.6 percent, after rising 7.1 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 3.5 percent in October, after rising 5.6 percent in September. Sales of apparel and accessories fell 7.2 percent, after falling 5.9 percent the previous month, which was the first drop in three months.
Sales of fuels dipped 0.9 percent on the year in October for the first drop in four months after rising 7.1 percent in September, 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 4.9 percent in October, after a 5.0 percent gain in September. Sales of machinery and equipment (largely consumer electronics) rose 0.9 percent in October for the fourth increase in a row after rising 4.8 percent in September.
Market Consensus Before Announcement
Japanese retail sales are forecast to have risen 5.8 percent on year in October, slowing from increases of a revised 6.3 percent in September and 7.1 percent in August as the prolonged heat wave dampened demand for autumn goods. New vehicle sales accelerated while fuel prices rose at a slower pace. Retail sales are seen down 0.3 percent on the month after rising 0.4 percent (revised up from a 0.1 percent dip) in September. 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, propping up department store sales.
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.
