A surprise jump in German retail sales and a sharp rise in an index of euro zone economic expectations offered new evidence today that European consumers were shaking off the trauma of September 11th.
The data reinforced the sense that the worst might be over for the European economy after a painful 2001 and that consumers will help fuel a recovery, taking advantage of falling inflation and low interest rates.
German retail sales rose 1.6 per cent month-on-month, confounding expectations that they would fall for the third consecutive month - one of the rare pieces of positive data Europe's largest economy has seen in recent months.
It was in line with surveys showing consumer confidence, shattered by the devastating suicide attacks on New York and Washington, rebounded after a US victory over the Taliban in Afghanistan.
Still, retail sales in Germany were down 0.4 per cent year-on-year, reinforcing fears that Germany failed to escape recession in the fourth quarter last year.
In contrast, year-on-year retail sales grew strongly in three smaller European economies. They were up 1.7 per cent in volume terms in the Netherlands and 2.6 per cent in Sweden in November and rose 4.1 per cent in Greece in October.
A further sign of consumer confidence came from West European car registration data which rose 1.2 per cent year on year in December.