Japanese Retail Store Sales fell by a seasonally adjusted 1.1% in March, much worse than the anticipated 0.4% decline that economists had forecast. March signals the sixth straight month in which the indicator of economic growth has slumped.
Interestingly, wholesales plummeted a dramatic 10.6% in the month alone. Of the last twelve months, nine of these have seen this portion of the metric decline. Each successive month in 2009 has seen wholesales plummet at an increasing pace. Indeed, this is a clear sign that producers of consumer goods are simply cutting back on production at an increasingly alarming pace.
While this may look terrible on the outside, cuts in production of final goods may actually reduce the deflationary pressure being felt by the Japanese economy. In February the isle-nation returned to a mode of declining prices. With cuts in orders for raw materials along with the hypothesized rise in consumer goods, Japanese companies may actually have a shot at returning to profitability.