Hopes for European growth hit by surprise fall in German sales
Retail sales drop of 0.2% on the month in real terms confounds expectations
A women carries a shopping bag of German clothing store Peek & Cloppenburg. Photograph: Leonhard Foeger/Reuters
German retail sales unexpectedly fell in April, data showed on Wednesday, dampening hopes that private consumption will propel growth in Europe’s largest economy this year.
The volatile indicator, which is often subject to revision, showed retail sales dropped by 0.2 per cent on the month in real terms, the Federal Statistics Office said. That confounded forecasts for a 0.2 per cent rise and came after an upwardly revised increase of 0.2 per cent in March.
On the year, shops saw sales decline by 0.9 per cent in April, contrasting with the consensus forecast for a 2.3 per cent increase.
The German economy was for years powered by exports but consumption was a key source of growth last year and is also expected to play an important role this year as traditionally thrifty Germans spend.
They are benefiting from record-high employment, a robust labour market, rising wages and low borrowing rates. The retail sales data comes on the heels of a GfK survey that showed German consumer sentiment at its best in almost 16 years heading into June.