Japanese retail sales are falling as Tokyo prices fall the most since 2010

Retail sales began to tumble and Tokyo consumer prices slipped mostly in a decade in November, according to government data, amid declining energy costs and record issues virus that kept customers home and darkened the recovery scene.

Quarterly retail sales fell 2% from the previous month, as consumers continued to cut back on clothing purchases, the economy ministry reported Friday.

Analysts had reduced forecasts by 0.8%. The government has maintained its assessment of relatively flat sales.

A separate report showed that Tokyo consumer prices fell without fresh food 0.9% more than expected, mostly since 2010, suggesting a deeper decline in national price movements on which the Bank of Japan looked to close. The BOJ last week called for a review of its policies to make them more sustainable, as the pandemic is likely to need to maintain stimulus measures longer.

Other data on Friday showed a very clear place for the country’s economy, with both the unemployment rate and a tight key metric in the labor market improving.

Job numbers are positive for households, but sharp cuts in bonuses at the largest companies in the country this winter are likely to draw more warnings about spending. Friday’s data could be just the first signs of a renewed weakness in consumer spending, a key driver of Japan’s attack since its pandemic downturn.

The trend is likely to worsen as the virus has spread rapidly since the second half of November, with new confirmed cases nationwide rising above 3,000 on two recent days.

“With the spread of the virus to this point, the government needs to set aside recovery ideas for now,” said economist Atsushi Takeda of the Itochu Research Institute. “There is no point in getting back to a position where people can eat without fear.”

Recorded virus cases this month have led Prime Minister Yoshihide Suga to suspend a travel promotion program over the New Year holidays, and local leaders are even urging seniors to wear masks at home.

The trends, along with heightened concerns, will hit restaurants, hotels and shops during the main spending season.

Most analysts are seeing growth slow in this quarter to a slight pace of the summer, with some now showing the risk that the economy could recover again. early 2021.

A ¥ 73.6 trillion stimulus package announced this month may help Suga, but much of the new spending is for long – term goals to make the economy greener and digital in the wake of the pandemic.

Retail sales rose 0.7% compared to the previous year, as consumers reacted to an increase in sales tax. Economists had estimated a 1.8% increase.

A separate report showed that Japan ‘s unemployment rate improved, falling to 2.9% in November. The jobs-to-candidate ratio rose to 1.06, improving for a second month. The ratio means that work offers candidates higher than 106 to 100.