Euro-Region Retail Sales Unexpectedly Increased in May

European retail sales unexpectedly increased in May as gains from France to Ireland and Portugal helped offset decreasing demand in Germany.

Sales advanced 0.6 from April, when they slipped 1.4 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast sales to remain unchanged, the median of 16 estimates in a Bloomberg News survey showed. From a year earlier, sales fell 1.7 percent.

Europe’s economy probably failed to grow in the second quarter as budget cuts eroded consumer spending just as companies stepped up job cuts and global demand faltered. Euro- area unemployment jumped to a record high in May, economic confidence slumped to the lowest in more than 2 1/12 years last month and services industries contracted in June.

In France, the euro area’s second-largest economy after Germany, retail sales rose 1.2 percent in May from the previous month, when they dropped 2.1 percent, today’s report showed. In Spain and Ireland, sales advanced 1.2 percent and 1.7 percent in the month, respectively. Portugal reported a gain of 2.9 percent. German retail sales fell 0.3 percent from April.

The statistics office didn’t report data for Greece and Italy.

To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net