Retail sales in Germany declined unexpectedly for a second consecutive month in February as concerns regarding rising fuel prices largely eclipsed positive sentiment from strong labor market conditions.
The calendar and seasonally adjusted retail sales fell 1.1 percent month-on-month in real terms in February, following a 1.2 percent drop in January.
Economists had expected 1.2 percent increase in sales during the month. Sales have fallen in four of the past six months.
Retail sales rose 1.7 percent annually at the same pace as in the previous month. This beat forecast for a 0.1 percent increase.
According to the latest survey by research firm GfK, lower income expectations due to fuel price hike is likely to weigh on consumer optimism in April. However, the resilient labor market and fading debt troubles is widely expected to ease the squeeze on consumers' purchasing power in the coming months.
The unemployment rate in Germany hit a fresh record low of 6.7 percent in March, according to government data released yesterday. The latest Manpower survey showed that employers intends to hire more staff in the coming quarter. The trend is likely to be underpinned by business confidence, which is at an eight-month high in March, as indicated by a survey by Ifo Institute.
The German economy contracted 0.2 percent in the fourth quarter. The Organization for Economic Co-operation and Development said yesterday said that it expects Germany to grow 0.1 percent in the first quarter and 1.5 percent in the next three months. The European Commission sees 0.6 percent growth for the economy this year.
by RTT Staff Writer
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