German Retail Sales Unexpectedly Fall a Second Month
German Retail Sales Unexpectedly Fall a Second Month
Guido Krzikowski/Bloomberg
German retail sales unexpectedly fell for a second month in July.
German retail sales unexpectedly fell for a second month in July. Photographer: Guido Krzikowski/Bloomberg
German Retail Sales Unexpectedly Fall a Second Month
Guido Krzikowski/Bloomberg
Germany's household spending rose 0.6 percent in the second quarter from the previous three months.
Germany's household spending rose 0.6 percent in the second quarter from the previous three months. Photographer: Guido Krzikowski/Bloomberg
Retail sales in Germany, Europe’s largest economy, unexpectedly fell for a second month in July after helping fuel record growth in the second quarter.
Sales, adjusted for inflation and seasonal swings, declined 0.3 percent from June, when they also dropped 0.3 percent, the Federal Statistics Office in Wiesbaden said in an e-mailed statement today. Economists forecast a gain of 0.5 percent, the median of 16 estimates in a Bloomberg News survey showed. In the year, sales increased 0.8 percent.
“Retail sales are highly volatile” and “have to be taken with a pinch of salt,” said Carsten Brzeski, an economist at ING Group in Brussels. “Private consumption surprised already in the second quarter and, backed by a strong labor market, more positive surprises seem to be in the offing.”
German consumer spending may get a boost as companies step up output and hiring to meet reviving export demand. Unemployment fell for a 14th month in August, business confidence surged to the highest in three years and GfK AG said its monthly index of household confidence also rose.
Inditex SA, Europe’s biggest clothing retailer, is in talks with landlords to open more stores in Germany, the Financial Times Deutschland newspaper reported Aug. 12. Henkel AG, the German maker of Persil detergent, raised its full-year earnings outlook on Aug. 4 after second-quarter profit almost doubled.
Household spending rose 0.6 percent in the second quarter from the previous three months, when it dropped 0.1 percent. The economy expanded 2.2 percent in that period, the fastest pace in two decades and more than twice the euro region’s growth rate.
“What is coming through more and more is evidence of improving domestic demand,” Goldman Sachs Group Inc. Chief Global Economist Jim O’Neill said in an interview on Bloomberg Television’s “InsideTrack” with Deirdre Bolton on Aug. 25. “It’s been such a long time since the German consumer has been spending. If it were for real, it’s going to turn out to be major.”
To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net.
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