German Retail Sales Decline in June After Biggest Increase in Two Years
Retail sales in Germany, Europe’s largest economy, fell in June after surging the most in more than two years the previous month.
Sales, adjusted for inflation and seasonal swings, slipped 0.9 percent from May, when they rose 3 percent, the Federal Statistics Office in Wiesbaden said in a statement today. That was the most since January 2008. Economists forecast a decline of 0.2 percent, the median of 14 estimates in a Bloomberg News survey showed. In the year, sales rose 3.1 percent.
“After last month’s jump a backlash had to be expected,” said Alexander Koch, an economist at UniCredit Group in Munich. “The trend is for solid consumer spending as the economy is doing well and German consumers are starting to overcome their fear of losing their jobs.”
German companies are stepping up output and adding workers as an Asian-led global recovery boosts export orders, which in turn may encourage consumer demand. German business confidence surged to the highest in three years in July and GfK AG said its monthly index of household confidence increased.
German unemployment declined for a 13th month in July, lowering the jobless rate to 7.6 percent from 7.7 percent, the Federal Labor Agency said yesterday. The drop came the same day as companies from Siemens AG, Europe’s largest engineering company, to BASF SE, the world’s biggest chemical company, reported earnings that beat analysts’ estimates.
German economy Minister Rainer Bruederle said on July 27 that he expects consumer spending to “increase in the course of this year and make a positive contribution to the broad economic development.” Hugo Boss AG, Germany’s largest clothing maker, yesterday reported a 31 percent gain in first-half profit.
The Bundesbank said last month it expects the German economy to expand 1.9 percent this year and 1.4 percent in 2011.
To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net
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