Japanese retail sales declined in April, led by cars and clothing, signaling the increase in consumer spending that probably helped the economy return to growth last quarter is already petering out.
Sales dropped 0.8 percent, seasonally adjusted, last month from March, as auto sales dropped 5.6 percent, government figures showed.
Retail sales have fallen the past three months after rising 2.7 percent in January. From a year ago, retail sales fell 4.1 percent.
Yesterday's report offers this quarter's first comprehensive look at consumer spending, which accounts for about 55 percent of Japan's domestic economy.
A decline in spending after companies from Hitachi Ltd to Toyota Motor Corp refused union requests to raise monthly wages may stunt Japan's recovery from an 18-month recession.
"Consumers haven't yet gained faith in the recovery," said Kazuaki Otsuka, who helps manage Japanese yen 4 billion (US$32 million) at ING Mutual Funds Management Co.
"Even though things are becoming cheap, wages are declining and that makes it hard for them to spend."
The world's second-biggest economy probably grew at annualized 6.6 percent pace last quarter, according to a Bloomberg News survey of economists. The first growth in a year was led by rising exports and consumer spending, economists said.
"Given the worsening labor market, it's hard to see consumer spending picking up anytime soon," said Eishi Yokoyama, economist at Chiyoda Life Capital Management Ltd.
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