/www.bloomberg.com/ By Yoshiko Matsushita
Tokyo, Nov. 27 (Bloomberg) -- Japan retail sales declined in October as falling wages and a near-record jobless rate in the world's second-largest economy discouraged shoppers from spending on clothing and food at Seiyu Ltd., Uny Co. and other retailers.
Retail sales fell a seasonally adjusted 2 percent last month after being unchanged in September, government figures showed. From a year ago, sales fell 2.8 percent, the 19th straight drop.
The outlook for Japan's consumer spending remains bleak as a 17th straight monthly decline in wages and near-record jobless rate crimp consumers' appetite to spend. Weakness in consumer spending, which accounts for about 55 percent of the $4.2 trillion economy, may force Japan into a fourth recession in a decade, economists say.
``There's no immediate recovery seen in consumer spending,'' said Eishi Yokoyama, a strategist at AIG Global Investment Corp. ``While the jobless rate is staying high, the income environment is worsening. Economic outlook isn't good.''
Warmer-than-expected weather in October also hurt sales of sweaters, coats and heaters at Japan's major supermarkets. Sales at Seiyu, Japan's fifth-ranked retailer, fell 5 percent in October from a year ago, posting the biggest decline. Sales at sixth- ranked Uny Co. fell 4.5 percent while sales at Ito-Yokado Ltd., Japan's largest chain, fell 2 percent.
The average temperature in Tokyo was 19 degrees Celsius (66 degrees Fahrenheit), 0.8 degrees Celsius higher than average, and the temperature in Osaka, Japan's second-biggest metropolitan area, was 0.2 degrees higher at 18.9 degrees, according to the Meteorological Agency.
Jobless Rate
The Nikkei 225 average, the most widely watched measure of the Japanese stock market, rose 67.1 points, or 0.8 percent, to 8891.09 as of 11 a.m. in Tokyo. The dollar traded at 121.69 yen from 121.60 late yesterday in New York.
Cash earnings -- including salary, overtime and bonuses -- of employees at companies with five or more workers fell 1.2 percent in September from a year earlier, and have fallen since May 2001. Winter bonuses for employees at major Japanese companies fell 5.2 percent from a year earlier, the first decline in three years and the biggest drop since the survey began in 1975, the Nihon Keizai newspaper reported yesterday, citing its own survey.
In September, Japan's unemployment rate held at 5.4 percent for a fifth month, just shy of December's record 5.5 percent. The jobless rate will probably rise with the government's efforts to push ahead with plans to tackle more than $430 billion in bad loans at banks, economists say.
The shares of Ito-Yokado rose 110 yen, or 2.9 percent, to 3,930 yen at the 11 a.m. morning close of Tokyo Stock Exchange trading. Uny rose 36 yen, or 3.2 percent, to 1,147 yen while Seiyu gained 4 yen, or 1.1 percent, to 362 yen.
Total retail sales includes sales at supermarkets, department stores as well as auto, fuel and machinery retailers.
Today's report also showed sales at large retailers -- supermarkets and department stores and other large retailers -fell 4.7 percent from September, seasonally adjusted. From a year ago, sales at these stores open at least a year fell 1.9 percent, the Ministry of Economy, Trade and Industry reported.