22.10.2021

Japan Retail Sales Up More Than Forecast

Retail sales in Japan in April exceeded analysts’ expectations, returning to growth after the March decline, writes Bloomberg.

Retail sales in Japan last month jumped 1.4% compared with March. Analysts surveyed by Bloomberg averaged only 0.5% growth. In March, according to revised data, sales fell 0.6%.

In annual terms, retail sales increased in April by 1.6%. Experts predicted an increase of 1%.

Sales in department stores and supermarkets fell 0.8% year on year, instead of the expected 0.2% growth.

The increase in domestic consumption remains a key factor in order for the recovery of the Japanese economy to become sustainable.

Wages in the country are rising as companies hire more full-time full-time workers, giving households greater purchasing power.

According to Vesti.Ekonomika, the unemployment rate in Japan, seasonally adjusted in April was 2.5%, unchanged from the previous month. Evidence suggests that labor market conditions remain harsh.

Japan’s GDP in the first quarter decreased by 0.6% compared to the same period last year, as capital investment declined and personal consumption did not change.

An increase in spending could support the economic recovery and help the Bank of Japan in its quest to achieve the 2% inflation target.

Unemployment in Germany at a minimum since 1990

Germany’s unemployment rate hit a record low in May as the number of unemployed fell, data reflecting the stability of the labor market, which has become a key driver of the economic recovery caused by consumers.

According to the Federal Labor Office, the number of unemployed in Germany fell by 11 thousand to 2.358 million people. In a survey conducted by Reuters, it was estimated that the number would decrease by only 10 thousand.

This led to the fact that the unemployment rate dropped to 5.2%, the ministry said in a statement, which is the lowest rate since the country’s reunification in 1990.

“Unemployment and underemployment declined again, employment under the social security system continues to grow, and demand for labor is still high,” Detlef Scheele said in a statement.

“The upward trend in the labor market continues, although more slowly than in the winter months,” he said.

Labor Minister Hubertus Hale said he wants to cut unemployment insurance contributions by 0.3 percentage points to 2.7% of nominal wages from 2019. This will total annual savings of around 3.5 billion euros for employees and employers , he said.

Most of the 800 thousand vacancies registered in May were permanent, full-time jobs, taking into account social insurance contributions. Workers were mainly interested in construction, transportation and warehousing, as well as social and medical assistance.

A strong labor market is likely to further increase consumer confidence and household spending in Europe’s largest economy, which in recent years has begun to rely on domestic demand rather than export as the main growth factor.

KfW economist Jörg Seiner said German companies have become more cautious due to trade friction with the United States.

“However, the end of the rise is not yet visible. Companies in all sectors of the economy still employ workers, ”he added.

ECB will not intervene in the situation in Italy

The European Central Bank (ECB) is closely monitoring the markets and the political crisis in Italy, but sees no reason to intervene in the situation at present, Reuters sources said.

Market speculation about a possible Central Bank intervention in the situation appeared after political parties repeatedly failed to form a government. In addition, forecasts appeared about Italy’s possible exit from the eurozone.

But three sources told the agency that the ECB is not considering intervening, since most indicators do not show signs of stress in the banking sector, and the central bank does not have the tools or mandate to resolve what is essentially a political crisis.

According to Vesti.Ekonomika, Italy was on the way to a new election after President Sergio Mattarella instructed former official of the International Monetary Fund Carlo Cottarelli to form an interim government.

Earlier, lawyer Giuseppe Conte, nominated by the Five Star and Liga parties as prime minister, abandoned efforts to form a government because Mattarella opposed the appointment of Eurosceptic Paolo Savona as Minister of Economy and Finance.

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