Japan's Retail Sales Increase Most in Four Months
Bloomberg News
Japanese retail sales rose the most in four months, a sign the economy is shaking off a blow from a sales-tax increase in April as Prime Minister Shinzo Abe weighs another bump in the levy.
Sales climbed 2.7 percent in September from August when they rose 1.9 percent, the trade ministry said today in Tokyo. For the third quarter, sales were up 1.4 percent from a year earlier after a 1.8 percent drop in the second quarter.
The stronger sales could bolster proponents of a further rise in the levy, as debate heats up over whether the world's third-biggest economy can bear the burden. Abe is set to decide on the tax by the end of the year, taking into account the strength of the economy.
'The jump in retail sales in September confirms that private consumption is recovering from the slump caused by the sales tax hike,' Marcel Thieliant, a Singapore-based economist at Capital Economics, said in a report.
Japan's economy tumbled into its steepest contraction in more than five years after a 3 percentage point increase in the tax in April. Abe is weighing whether to go ahead with a hike to 10 percent next October, as legislated by the previous government.
Today's data showed the slump from the April increase has 'generally ended,' Junichi Makino, chief economist at SMBC Nikko Securities Inc., said in a report.
The outlook for consumer spending is tied to the strength of incomes. Living costs have been rising faster than gains in incomes, squeezing household finances.
'Wages will have to rise faster for spending to increase further,' said Thieliant.
To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net
To contact the editors responsible for this story: Brett Miller at bmiller30@bloomberg.net Arran Scott
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