German Retail Sales Increases for a Second Month as Unemployment Declines
German retail sales rose for a second month in January as declining unemployment boosted consumer confidence and spending power.
Sales, adjusted for inflation and seasonal swings, increased 1.4 percent from December, when they climbed 0.3 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 0.5 percent gain, according to the median of 18 estimates in a Bloomberg News survey. From a year earlier, sales advanced 2.6 percent.
Unemployment fell to a two-decade low of 7.3 percent in February as companies ramped up production and hiring to meet export demand, pushing up household income expectations. The German economy, Europe’s largest, may grow 2.5 percent this year after expanding a record 3.6 percent in 2010, Bundesbank President Axel Weber said on Feb. 23.
“This year should mark the comeback of consumption,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt. “The labor market is doing excellently and wages are rising faster than in previous years. But there are a few clouds on the horizon and the biggest one of them is called inflation. It’s not yet critical, but could gain in significance.”
German inflation accelerated to 2.2 percent in February, the fastest in 2 1/2 years, after oil prices surged amid political tensions in North Africa and the Middle East. European Central Bank officials meeting in Frankfurt today may revise up their inflation forecast for this year, council member Yves Mersch said in an interview published Feb. 22.
Rewe Group, Germany’s second-largest food retailer, said on Feb. 25 that full-year revenue rose to a record.
To contact the reporter on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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