–METI Reverses View: Retail Sales Are Flat Vs. Showing Signs of Pickup
–Y/Y Rise Led by Higher Fuel Prices, Less Strict Covid Rules Vs. January 2021
By Max Sato
(MaceNews) – Japanese retail sales posted the fourth straight year-on-year rise in January, led by higher fuel prices and solid department store sales, as resumed restrictions on economic activity that were expanded to many parts of the country late that month were short of a state of emergency issued a year earlier, data released Monday by the Ministry of Economy, Trade and Industry showed.
But sales marked the second straight month-on-month dip as people became more cautious than in the fall amid a spike in Covid cases that was sparked by the more contagious Omicron variant.
The key points from the METI’s Current Survey of Commerce:
* Japanese retail sales rose a preliminary 1.6% on the year in January after rising 1.2% (revised down from 1.4%) in December and 1.9% in November. It was firmer than the median economist forecast of a 1.4% rise. Sales of fuels continued to surge (up 22.8%) on rising energy prices while automobile sales remained sluggish (down 15.4%) amid supply constraints.
* On the month, retail sales slipped 1.9% on a seasonally adjusted basis in January for the second straight drop after falling 1.2% (revised from an initial 1.0% fall in December. The three-month moving average in adjusted sales fell 0.7% in January, the first drop in three months after rising 0.4% the previous month.
* The Ministry downgraded its view based on the near-term trend, saying retail sales are “flat,” compared to its previous statement that they were “showing signs of a pickup.” It was upgraded only last month from an earlier assessment that sales were “flat.”
* Industry data released last week showed department store sales recorded a solid 15.6% rise on year in January for a fourth rise in a row after an 8.8% gain in December as Covid restrictions took effect that month were less strict than those imposed under a state of emergency in January 2021.
* The Japan Department Stores Association note that while luxury goods continued drawing customers and sales of winter clothing were strong amid low temperatures in the first half of the month, the numbers of visitors to many stores dwindled in the second half, when the government urged restrictions on economic activity for 34 of the total 47 prefectures.