Japanese Retail Sales

Retail sales in Japan have risen for the fourth successive month and in February were at their highest level in the last thirteen years, as can be seen in the first chart. Data on retail sales are reported in index form on seasonally adjusted and unadjusted bases and in yen terms on a seasonally unadjusted basis. Using the advanced function and the seasonal adjustment function in DLX, it can be shown that the two sets of data show the same pattern. If we index the yen data to 2005=100 and compare it with the unadjusted index data, using the index option in the advanced function, the result is virtually the same, as shown in the second chart. And if we use the Seasonal Adjustment Function on the unadjusted yen data and index it to 2005=100 and compare this result with the adjusted& index data, the result is very close to the seasonally adjusted index data, as shown in the third chart.

The seasonally adjusted indexes show similar month to month changes, 2.0% and 2.1% between January and February, 2012 and the unadjusted indexes show similar year to year changes, 3.5% and 3.4 %, between February, 2012 and February 2011. While it is useful to have the data in index form as well as in yen terms, it is the recent up trend in the data that is currently of significance. It is one small indicator that the Japanese economy may, at last, be showing signs of expansion.