German retail sales fell unexpectedly in September, preliminary data showed today, in a sign consumers are holding back on purchases despite relative stability in the labour market.
Figures from the Federal Statistics Office showed sales fell 0.5 per cent month-on-month in real terms and declined by 3.9 per cent on the year. The annual fall was the fifth consecutive decrease.
A breakdown of the annual data showed households in Europe's largest economy were holding back on a broad range of purchases, with online and mail order items down 10.3 per cent in real terms and clothing and food also declining.
Germany pulled out of its sharpest post-war recession in the second quarter, and senior policymakers have said growth likely accelerated in the third quarter.
However, government stimulus has played an important hand in this, and participants at a meeting of Ms Merkel's conservatives last week said she believed the economy was heading for "extremely serious months" in early 2010.
Unemployment has been largely kept in check in Germany by a subsidy scheme known as "Kurzarbeit", which encourages firms to shift employees to part-time work rather than fire them.
Joblessness fell unexpectedly in October for a fourth straight month, data showed yesterday, as government measures to prevent layoffs supported the labour market.
However, most economists expect unemployment to rise steadily over the course of 2010 as companies, which are operating well below full capacity, pare back their workforces.
In nominal terms, retail sales fell 0.5 per cent month-on-month and decreased 4.8 per cent on the year, the Office said. In the first nine months of 2009, sales were down by 2.2 per cent in real terms year-on-year.
The figures were based on sales data from seven states accounting for around 76 per cent of retail activity in Germany.
Reuters