Japanese retail sales picked up further to a 2.8% increase on year in November (vs. consensus +1.7%) after accelerating to a 1.3% rise (revised down from 1.6%) in October from a 0.7% gain in September now that the protracted heat wave and warm weather gave way to lower temperatures, supporting demand for autumn and winter clothing. Higher gasoline prices pushed up fuel sales while department store chains reported better business, although high costs for necessities are keeping households wary of spending.

On the month, retail sales surged 1.8% thanks to a sharp rebound in clothing after a plunge in demand for seasonal goods the previous month. It followed a 0.2% slip (revised down from a 0.1% rise) in October and a 2.2% plunge in September for the first drop in six months. The increase came in much larger than the median economist forecast of +0.7%.

The Ministry of Economy, Trade and Industry maintained its assessment, saying retail sales are"taking one step forward and one step back." Previously, it had said sales were"on an uptrend."

Japanese retail sales are forecast to pick up further to a 1.7% increase on year after accelerating to 1.3% (revised down from 1.6%) in October from 0.7% in September now that the lingering heat wave had given way to lower temperatures, supporting demand for autumn and winter clothing. Higher gasoline prices pushed up fuel sales while department store chains reported better business, although high costs for necessities are keeping households wary of spending.

On the month, retail sales are expected to rise 0.7% after slipping 0.2% (revised down from a 0.1% gain) in October and plunging 2.2% in September for the first drop in six months.

Last month the Ministry of Economy, Trade and Industry maintained its assessment after downgrading it the previous month, saying retail sales are"taking one step forward and one step back." Previously, it had said sales were"on an uptrend."

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.