By Toru Fujioka
Oct. 28 (Bloomberg) -- Japan's retail sales dropped for the first time in 14 months in September as tumbling stocks and stagnant wages discouraged households from spending.
Sales fell 0.4 percent from a year earlier, the first decline since July 2007, after rising 0.7 percent in August, the Trade Ministry said in Tokyo today. The median estimate of 21 economists surveyed by Bloomberg was for sales to be unchanged.
Japan's stocks lost more than third of their value this month as an intensifying global credit crunch clouded the outlook for the export-led economy. Spending was weakening even before the stock rout as households cut purchases at the fastest pace in two years in August amid stagnating wages.
``Households don't want to spend given the sharp fall in stocks and sluggish income,'' said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. ``I see no strength in consumer spending to support the economy at this point.''
Prime Minister Taro Aso is expected to unveil an economic stimulus package this week, including 2 trillion yen in tax cuts to support low-income earners. The government this month downgraded its evaluation for consumer spending, which accounts for more than half of the economy, as household sentiment hovers close to record lows.
Sales at supermarket and department stores fell in September. The drop in department store sales came as ``sentiment among consumers worsened amid clearer signs the global economy is headed in a recession,'' the Japan Department Store Association said in a statement released on Oct. 17.
Kyotaru Co., a takeout Sushi chain, said it will close its 23 restaurants before December as consumers avoid eating out to save money, the company reported this month. Kyotaru's loss is likely to widen 17 times more than its initial estimate at the end of this year, the company said.
To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net
Posts
No comments:
Post a Comment