Japan’s Industrial Production Surges in January

Japanese industrial production surges in January from 2015 low when it dropped 1.7 percent.

In January, Industrial production rose 3.7 percent beating 3.2 percent forecast by economists. Retail sales on the other hand posted the first three month slide since 2012, painting a mixed picture of the economy.

The data shows little hope the economy may be expanding after contracting in the last quarter of 2015.

“Japan will probably return to growth this quarter,” Hiroaki Muto, chief economist at Tokai Tokyo Research Center Co. in Tokyo, said before the release. “But the recovery momentum may be weak given clouds on the horizon of the global economy.”

Retail Sales

Retail sales fell again in January after falling 0.3 percent in December. Dropping 1.1 percent from December.

One key takeaway, is the possibility of poor consumer spending which played pivotal role in economic contraction, especially last quarter. This may continue if nothing is done about earnings. The weakness in consumer spending highlights the need for better pay increases to spur spending.