Euro zone retail sales rose moderately in May after a sharp decline in April, data showed today, pointing to continued weakness in consumer spending and a fragile economic recovery.
European Union statistics office Eurostat said retail sales in the 16 countries that share the euro single currency, a good indication of households' propensity to spend, rose 0.2 per cent during the month and 0.3 per cent since May last year.
Economists polled by Reuters had expected a 0.4 per cent monthly increase and a 0.3 per cent year-on-year decline.
"The underlying softness in euro zone retail sales is highlighted by their being only flat in the three months to May compared to the three months to February," said Howard Archer, chief European economist at IHS Global Insight.
"Indeed, the ingredients hardly form a heady cocktail for euro zone consumer spending - confidence is relatively subdued and fragile, the euro zone unemployment rate is currently at a near 12-year high, wage growth is muted, and fiscal policy is being tightened appreciably in many countries."
Eurostat revised up the April retail sales figure to -0.9 per cent month-on-month and -0.5 per cent annually, from previous readings of -1.2 per cent and -1.5 per cent respectively.
Consumer demand is weak because unemployment in the euro zone is near 12-year highs of 10 percent and may rise further, keeping a lid on wage growth and limiting households' spending.
Retailers in Europe have been struggling with weak consumer morale despite signs of economic recovery as many government ordered spending cuts to alleviate the sovereign debt crisis.
Eurostat said food drinks and tobacco sales increased 0.2 per cent month-on-month in the euro zone in May while non-food products were up 0.4 percent. Year-on-year, the figures were 0.3 and 1.0 per cent respectively.
Germany, the euro zone's biggest economy, saw retail sales grow 0.4 per cent in May, while France rose by 0.2 per cent.
In the whole 27-nation European Union retails trade increased by 0.4 per cent and 0.5 per cent, boosted by figures in non-euro Britain and Poland.
Reuters