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Economy in Brief

Summer Retail Sales Slow in Japan & Italy, Firmer in Norway & Slovenia
by Carol Stone August 30, 2006

Retail sales data were reported today for four very different economies. While "globalization" may be bringing many aspects of the world economy closer together, these reports indicate that people's shopping behavior varies widely from place to place.

In Japan, sales were off 1.7% in July from June, and remained marginally under the year-ago volume. As seen in the graph, the best we can say for Japan's retailing sector is that it is stabilizing after a protracted period of decline. We are all pleased with the growth that is developing in Japan overall, but consumers seem not yet to be participating. Louise Curley also made this point yesterday in her discussion of the monthly survey on households' living expenditures. Among the retail sales segments, there is some slight growth in food, and clothing has been flat since late 2003. Downtrends are still evident at general merchandise stores and household furnishings. Motor vehicle dealers saw lower sales in July, after a basically trendless period since early 2004.

Retail sales are also fairly slow in Italy, hovering in a narrow band the past three years. In June, total sales were up a mere 0.1% from May and 1.3% from the year before. We admit to being mildly amused that the greatest strength among Italian retailers is at supermarkets and other food stores. It's good to know Italians enjoy Italian food as much as the rest of us do. Non-food stores' sales are lagging, however.

Two smaller European countries are seeing good growth in retail sales. In Norway, they were up 0.6% in July, after falling 0.8% in June. But they are up 3.6% from July 2005 and the longer-term performance shows an annualized pace of 4.6% over the past five years. In Slovenia, the growth is stronger still: 8.7% from one year ago and a 5.6% average rate of change from five years ago. Available detail indicates that Slovenians are busy buying cars and other vehicles and fueling and servicing them; those sales ran a sizable 17% above a year ago in volume terms. Standard "retail trade" stores report growth from the year ago of 2%.

Indexes, 2000=100, Seas Adj July 2006 June 2006 May 2006 Year Ago 2005 2004 2003
Japan 92.1 93.7 93.8 92.2 93.0 91.7 92.5
Italy -- 108.3 108.2 107.0 107.3 106.9 107.3
Norway 126.16 125.41 126.46 119.53 119.34 114.53 110.68
Slovenia (NSA) 147.4 149.7 148.6 135.6 135.2 123.3 117.4
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