28 October 2002, 09:14  Japan Retail Sales Fall 0.1% in Sept. on Lower Wages

/www.bloomberg.com/ By Daisuke Takato and Ann Saphir
Tokyo, Oct. 28 (Bloomberg) -- Japanese retail sales fell for a third month in four in September as a near-record jobless rate and falling wages kept shoppers from buying cars, luxury food items and personal computers.
Retail sales fell a seasonally adjusted 0.1 percent last month after a 2.7 percent gain in August, pulled down by a 0.8 percent decline in car sales, government figures showed. From a year ago, sales dropped 3 percent. For the quarter, retail sales fell 0.7 percent, a second-quarterly drop.
The drop means the world's second-largest economy may not have grown as fast as economists expected last quarter, analysts said. Economists use today's number, along with household spending figures to be released tomorrow, to track consumer spending, which accounts for more than half of the $4.2 trillion economy.
``Falling wages as well as the uncertainty about future employment conditions seem to be weighing on consumers' behavior,'' said Matthew Poggi, an economist at Lehman Brothers Japan Ltd., who will wait until he sees tomorrow's spending report to decide whether to cut his 0.2 percent forecast for economic growth last quarter. ``Consumer spending is likely to remain subdued for some time.''
The economy probably grew 0.3 percent in the three months to Sept. 30, according to the median forecast of five economists surveyed by Bloomberg News. The government will release its third- quarter growth estimate on November 13.
Computer Sales
Wages have fallen 16 straight months and economists say the jobless rate probably rose to 5.5 percent in September, matching December's record. The jobless report also is released tomorrow.
``With wages expected to decline in coming months, retail sales are going to drop gradually,'' said Motomitsu Honma, an economist at Mitsui Sumitomo Asset Management. ``Sales won't rebound any time soon.''
Sales of personal computers at Japan's large electronics stores fell 10 percent or more for the first three weeks of September, before rising less than 2 percent the final two weeks, according to a survey by Nikkei Market Access.
Mitsubishi Motors Corp., Japan's fourth-largest automaker, said earlier this month sales dropped for the 26th consecutive month in September, as a lack of new models hurt domestic sales. Sales at the automaker, 37 percent owned by Daimler Chrysler AG, sank 22 percent to 19,634 units.
Mitsukoshi, Japan's second-largest department store, cut its full-year profit forecast 8.3 percent last week as it expects a slide in sales of food and other items to continue into the fiscal second half that ends Feb. 28. The Tokyo-based retailer expects group net income of 5.5 billion yen ($44 million) for the period, compared with its April forecast of 6 billion yen.
Supermarkets
``Sales were hurt by the negative attitude consumers have toward food products and by having fewer customers,'' Mitsukoshi president Taneo Nakamura said at a news conference last week. ``We are expecting lower sales and lower profit for the full-year.''
Clothing discounter Fast Retailing Co. reported its first earnings decline in 14 years this month, and it expects annual profit to slide further in the fiscal year ending in February. Japan's biggest casual clothing retailer, which operates Uniqlo stores, expects group net income to fall 28 percent to 20.2 billion yen.
Sales at supermarkets and department stores and other large retailers open at least a year rose 0.2 percent from August and fell 0.7 percent from a year earlier, the Ministry of Economy, Trade and Industry reported.
The yield on the benchmark No. 243 bond fell 3 basis point to 1.04 percent as of 2 p.m. in Tokyo. A basis point is 0.01 percentage point.

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