Healthy picture for German economy as retail sales rebound

German retail sales rose month-on-month at their strongest pace in nine months in July, reinforcing expectations that private consumption will support growth in Europe’s largest economy this year.

The 1.4 per cent increase, measured in real terms, was above a Reuters consensus forecast for a rise of 1.0 per cent and the biggest monthly increase since October of last year.

Retail sales is a notoriously volatile indicator that is often subject to large revisions. The June reading was revised to a drop of 1.0 per cent from an originally reported decline of 2.3 per cent.

On a year-on-year basis, retail sales posted their second strong month of strong gains, rising 3.3 per cent after a 5.2 per cent increase in June. A breakdown showed a robust 9.2 per cent rise in internet and mail-order sales.

The robust retail sales figures add to a generally healthy economic picture in Germany, although a slowdown in China has raised questions about whether exports could weaken later this year.

Reuters