where japan goes, us will follow

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    Japan retail sales fall for 19th straight month




    Tuesday November 26, 7:19 PM EST

    TOKYO, Nov 27 (Reuters) - Activity in Japan's retail sector deteriorated for a 19th straight month in October as consumers tightened their purse strings amid worries about jobs and worsening income conditions.

    The Ministry of Economy, Trade and Industry (METI) said on Wednesday retail sales fell 2.8 percent in October from a year earlier -- slightly better than a 3.0 percent drop in September.

    Month-on-month figures showed retail sales fell 2.0 percent from September on a seasonally adjusted basis.

    "Personal income is declining rather steeply, so it's no surprise that consumption is not strong," said Naoki Murakami, an economist at BNP Paribas in Tokyo.

    Underlining a lack of appetite for spending, supermarket chain store data released on Tuesday showed sales at 1.15 trillion yen ($9.46 billion) in October, down 2.7 percent from a year earlier and a fourth straight month on decline.



    Personal consumption has been holding steady despite a sluggish economic recovery -- July-September gross domestic product data showed private-sector consumption rising 0.8 percent from the previous quarter.

    But personal spending is seen at greater risk as wages and job conditions are expected to deteriorate further.

    A poll in business daily Nihon Keizai Shimbun released on Tuesday showed that this year's average winter bonus payment was expected to be down 5.16 percent from last year to 727,203 yen, the first drop in three years.

    A Reuters poll of 20 economists showed they expected October's unemployment rate to revisit the postwar high of 5.5 percent marked in December last year.

    The government will release the latest jobs data on Friday.

    Prime Minister Junichiro Koizumi's administration is compiling an extra budget for the fiscal year to next March that will include some three trillion yen in new spending focused on "safety nets" for smaller firms and employment as the economy deteriorates. More fallout is expected as the government pushes ahead with efforts to clean up bad loans in the banking sector.


 
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