German retail sales fell the most in two years in September, data showed on Monday, dampening hopes that private consumption will continue to support growth in Europe’s biggest economy after consumer morale deteriorated slightly.
The volatile indicator, which is often subject to revision, showed retail sales unexpectedly fell by -1.4 per cent on the month in real terms, the Federal Statistics Office said. This confounded a forecast in a Reuters poll for a 0.2 per cent rise.
A breakdown of the data suggested that the fall was mainly due to an unusually warm September, which dampened sales of winter clothing and footwear.
On the year, retail sales rose by 0.4 per cent in real terms, the data showed, undershooting the Reuters consensus forecast of a 1.6 per cent increase. The monthly figure for August was revised up to a fall of 0.3 per cent from a previously reported dip of 0.4 percent. The yearly value was revised up to an increase of 3.8 per cent from a previously reported rise of 3.7 per cent. The weak data came after a survey by the GfK research institute showed last week that the mood among German consumers worsened heading into November.
Still, Germany’s HDE retail association expects overall nominal sales to grow by 2.5 per cent this year. Record-high employment, rising real wages and ultra-low borrowing costs have boosted the spending power of Germans, making consumption the main driver of growth in a traditionally export-driven economy. - (Reuters)
