Retail sales in Japan increase the most in 10 months, signal economic rebound

TOKYO (Reuters) – Japanese retail sales recorded the fastest growth in 10 months in October, with consumers bombarding more and more gasoline, cars, drugs and cosmetics, a sign that consumer spending private should put the economy back on track.

The 3.5% annual increase in retail sales in October compared to the previous year far exceeded the median estimate of 2.6% and follows a revised 2.2% increase in September.

This is the fastest annual gain since last December.

Retail sales are a key indicator of the strength of private consumption, which accounts for about 60% of the Japanese economy. The data confirmed that they had risen for a year in a row, reflecting a tense labor market and progressive wage growth.

Decision-makers are counting on an increase in private consumption to accelerate inflation and reach the 2% target set by the central bank, with basic consumer prices rising only half as much as boosted mbadively by more than five years.

On a seasonally adjusted basis, retail sales rose 1.2% in October, compared to a revised 0.1% increase the previous month, data from the Ministry of Economy, Trade and Commerce said Thursday. l & # 39; industry.

This was the fifth consecutive month of monthly gains, the largest increase since June.

The Japanese economy, the third largest in the world, experienced a stronger contraction than expected in the third quarter, affected by natural disasters and weak exports.

However, a series of data expected this week, including factory production and jobless figures, should reinforce the general view that the contraction was temporary.

The economy is generally expected to return to growth in the current quarter, although the strength of this rebound remains to be debated. Slowing global demand and the intensification of the US-China trade war are clouding Japan's export-dependent outlook.

Japan's manufacturing activity grew at the slowest pace in two years in November and new orders contracted for the first time since September 2016, a preliminary survey revealed on Monday.