German Retail Sales Increased for a Second Month in September

German retail sales increased for a second month in September as rising wages and unemployment near a two-decade low boosted consumer confidence.

Sales, adjusted for inflation and seasonal swings, rose 1.5 percent from August, when they advanced 0.1 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 0.3 percent, according to the median of 17 estimates in a Bloomberg News survey. Sales dropped 3.1 percent from a year earlier, due partly to the fact that September 2011 had one more shopping day.

While Germany’s jobless rate rose for the first time in three years in September, at 6.9 percent it is still close to the lowest since reunification. That will help to drive consumer sentiment to a five-year high in November, market research company GfK predicted last week. Still, business confidence is at a 2 1/2 year low as the debt crisis curbs exports and damps growth in Europe’s largest economy.

“Higher unemployment won’t necessarily have an effect on retail sales right away,” said Alexander Krueger, chief economist at Bankhaus Lampe KG in Dusseldorf. “But it probably will at some point, and that’s why I expect consumers’ purchases to fall in the coming months.”

While the German economy may contract in the fourth quarter, private consumption will continue to support growth, the Bundesbank said last week. Financial markets have also rallied since the European Central Bank pledged to do whatever it takes to preserve the euro.

Metro AG, Germany’s biggest retailer, said yesterday it’s ready for the Christmas season and “positive” on the outlook for the fourth quarter, boosting the shares after third-quarter earnings missed estimates.

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