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Economy in Brief

Japan Retail Sales Hit Some Highlights
by Robert Brusca March 15, 2010

Japan with one of the world’s most entrenched recessions produced some absolutely glowing consumer results for January. If Japanese consumers can break out of their doldrums, maybe, -just maybe- there is still hope for Germany and for Europe.

Also for the first time in EIGHT MONTHS the Japanese government raised its assessment of the economy, saying the recovery is beginning to spur profits, home building and consumer spending.

“The economy has been picking up steadily,” though it remains in a “difficult situation” because of high unemployment. This statement was from Japan’s key the Cabinet Office which said today in its report for March that the rebound is still weak. Still, it is a hopeful remark and Japan’s retail sales underscore that at least one undercurrent of good news has broken though to at least one important headline.

Japan’s seasonally adjusted headline for retail sales shows an acceleration to a growth rate of 7.1% over three-months compared to 4.5% over six months and 2% over 12 months. These are huge accelerations especially from -9.2% for the year end one year ago in January 2009.

Japan’s acceleration in retail sales is in retrospect remarkable. We are always looking at the level of the growth rate and for Japan that has been persistently negative. Moreover, Yr/Yr calculations that are slower to turnaround tend to dominate analysis. But Japan has come a long way on that measure too, to a 2% growth rate in Jan 2010 compared to a minus 9.2% for the same Yr/Yr rate in Jan 2009. To be able to post a three-month annualized growth rate of seven percent in this environment is excellent and remarkable.

The cabinet office interpretation is putting its stamp of approval on this improvement and a stamp of expected longevity on the rebound itself.

Japan Retail Sales Trends
  Jan-10 Dec-09 Nov-09 3-mo 6-mo 12-mo Yr-Ago Q-to-Date
Total SA 2.0% -0.3% 0.0% 7.1% 4.5% 2.0% -9.2% 11.5%
Not seasonally adjusted
Total: Nominal 2.4% -0.2% 0.0% 8.7% 5.4% 2.2% -10.1% 14.0%
  Motor Vehicles 2.5% -2.2% 4.2% 18.8% 18.6% 14.0% -10.1% 14.9%
  Food& Beverage 5.1% -1.1% -0.8% 13.3% 4.5% 1.3% 10.7% 27.3%
  Fabric apparel & access 3.1% 0.8% 1.6% 24.5% 10.8% 6.3% -16.5% 28.0%
  Rest of Retail 0.5% 0.7% -0.9% 1.2% 2.0% -0.6% -20.1% 4.0%
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