Retail sales rose at the fastest pace in more than a year as consumers bought new-model cars and record gas prices increased revenue at filling stations.
Sales climbed 0.8 percent in October from a year earlier, a third monthly gain, the Ministry of Economy, Trade and Industry said Wednesday. The median estimate of 24 economists surveyed by Bloomberg News was for a 0.7 percent increase.
Car sales rose the most in more than a year, as new models released by Toyota Motor Corp. and Mazda Motor Corp. generated enough buzz to lure people to dealerships amid the lowest consumer sentiment in three years. Falling wages and a weakening job market suggest the spending spree is unlikely to continue.
"The numbers weren't so strong, given that the car sales figures were pushed up by the introduction of new models," said Azusa Kato, an economist at BNP Paribas Securities Japan Ltd. in Tokyo. "With the labor market and wages weak, we're not going to be able to count on consumption as a source of growth."
The ministry raised its assessment of retail sales for the first time in more than two years, saying they are "showing signs of improvement." It said the upgrade reflects the three monthly increases.
Fuel sales advanced 2.3 percent from a year earlier, the most in 11 months, the report shows. Motor vehicle sales surged 2.5 percent, the fastest pace since March 2006.
Sales of clothing slid 1.3 percent, as mild weather reduced demand for jackets and sweaters.
"People will spend, but they have to be inspired," said Yasuyuki Sasaki, a retail analyst at Lehman Brothers Japan Inc. in Tokyo. "Wages aren't going up and prices of food and gas are rising, so it's hard to have an optimistic outlook."