Retail sales jump in Japan thanks to consumer spending | Business and Economy News

The outlook for a consumer-led recovery, however, is clouded by uncertainties surrounding the Omicron variant.

Retail sales in Japan grew faster than expected in November, thanks to the decrease in COVID-19 cases during the month, which encouraged buyers to increase their spending on goods and services.

To support the economy, the government on Friday approved a record budget of $ 940 billion for fiscal 2022, including cash payments to families and businesses affected by the pandemic.

The prospects for a consumer-led recovery, however, are clouded by uncertainties over the new variant of the Omicron coronavirus, which began to spread in the community last week in Japan’s largest cities.

“So far, consumers haven’t been overly concerned about the Omicron, as foot traffic data continues to increase,” said Masato Koike, senior economist at the Dai-ichi Life Research Institute.

The government said last Thursday that it did not plan to immediately change national COVID-19 restrictions due to the new variant.

“But if new infections increase… there is a risk, or likelihood at this point, that consumption will be phased out by the Omicron,” Koike said, adding that travelers returning during the holiday season could spread infections.

Retail sales rose 1.9% in November from a year earlier, government data showed on Monday, faster than economists’ median forecast for a gain of 1.7% and an advance of 0 , 9% in October.

Fuel sales rose 29.2% in November from a year ago, thanks to soaring commodity prices, pushing the overall retail trend higher. Car sales fell 14.1% due to supply bottlenecks, and electronics sales fell 10.6% due to lower demand for home appliances.

Compared with the previous month, retail sales increased 1.2% in November on a seasonally adjusted basis, following a revised downward 1% increase in October.

After the government lifted the pandemic restrictions in September, daily nationwide COVID-19 cases in Japan fell to less than one per million people earlier this month.

No restrictions have been reinstated, other than tighter border controls to stop the spread of the new Omicron variant.

The world’s third-largest economy is expected to rebound 6.1% at an annualized rate during the current quarter, against a drop of 3.6% in July-September, according to the latest survey of economists from the Reuters news agency.

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