Retail sales grew at their fastest pace in more than a year as a consumer spending rebound from the March 11 disasters helped the economy tide over the deepening export slump.
Retail sales rose 2.5 percent in December from a year earlier, the Ministry of Economy, Trade and Industry said Friday, the biggest advance since August 2010 and exceeding the 2.1 percent median forecast in a survey of 17 economists.
Compared with November, sales climbed 0.3 percent.
“Consumers are gradually regaining their appetite,” said Yoshimasa Maruyama, chief economist at Itochu Corp. “But we can’t rule out the possibility that declines in exports and production due to the global economic slowdown will weaken employment and incomes.”
Consumers are picking up some of the slack after export shipments slid the most since May.
Bank of Japan Gov. Masaaki Shirakawa said this week consumer spending has been”unexpectedly robust,” citing the potential benefits of a strong yen, which makes imports cheaper, and increased demand in the aftermath of the March earthquake and tsunami.
Food and clothing were among items that led to higher retail sales last month, METI said. Sales at Fast Retailing Co.’s Uniqlo stores surged 14.2 percent in December from a year earlier, the first increase since July.
A resurgence in household demand, which slumped in the aftermath of the quake as weaker confidence and electricity shortages kept people at home, has been a boon for retailers, including Aeon Co. and Lawson Inc., which both posted record operating profits in the nine months that ended Nov. 30. Sales at convenience stores open at least a year rose 4.1 percent in December from a year earlier, according to the Japan Franchise Association.
Retailers got a boost from the first holiday season since the March temblor, the Japan Department Stores Association said Jan. 19. Sales at department stores in the northeast rose 5.8 percent last month, the industry group said.
“Last December was special as households were really in the mood to shop after what they went through in the aftermath of the disasters,” said Hiroyuki Fujiwara, a senior analyst at Nippon Research Institute, which specializes in consumer and corporate behavior and conducts research for the government. “The strong retail sales confirmed the momentum, but the question is how long this will last as we aren’t seeing any encouraging signs of a recovery to other areas of the economy.”
Earthquake survivors in the northeast are tapping record growth in deposits that have swelled from insurance payouts and donations. Household deposits in the Tohoku region rose 8 percent in November from a year earlier, the biggest gain since the BOJ started compiling comparable data in 1999.
In a sign that exports are losing their status as a driver of growth, a report this week showed Japan posted its first annual trade deficit since 1980. A yen near postwar highs against the dollar and factory disruptions from the March disasters curbed overseas shipments and higher energy demands bolstered imports.
Separate economic releases Friday showed core consumer prices, which exclude fresh food, slid 0.1 percent in December, the third consecutive decline. BOJ Policy Board members expressed concern last month about how the yen’s appreciation and slower global demand would hurt exporters, according to a record of their December meeting.
CPI dipped 0.3% in 2011
The economy continued to suffer deflation last year, with key consumer prices declining 0.3 percent as rising energy costs were offset by falls in prices for durable goods, government data showed Friday.
The core consumer price index, which excludes fresh foods, fell for the third straight year in 2011 to 99.8 against the 2010 base of 100, the Internal Affairs and Communications Ministry said.
In December alone, the core CPI dropped 0.1 percent from a year earlier to 99.6 for the third straight monthly fall, matching forecasts by economists.
The price index for Tokyo’s 23 wards, indicating future developments throughout the country, lost 0.4 percent in January to 98.8, the ministry said in a preliminary report. The fall was almost in line with market forecasts.
The Bank of Japan has said it will keep its ultraloose monetary policy in place to support the economy until it judges the annual inflation rate is steady at around 1 percent.
In 2011, the core CPI declined due mainly to continued slides in durable goods prices — televisions down 30.9 percent from 2010 and refrigerators down 25.9 percent. Falls in those products were faster than the rate of increase in energy costs, including those for gasoline and electricity.