German retail sales fell unexpectedly in May for the second month in a row as consumer spending was weighed down by weak economic prospects and the unresolved eurozone debt crisis.
Sales were down by real 0.3 percent month-on-month in May, marking a second consecutive monthly fall, the latest figures from the Federal Statistical Office showed Friday. The outcome was in contrast to expectations for an increase of 0.2 percent and follows a 0.2 percent drop in April.
Year-on-year, sales dipped 1.1 percent in real terms, confounding the forecast for a 1.9 percent increase. In April, retail sales were down 4.3 percent compared to the same month last year.
Food, beverages and tobacco product sales edged up 0.1 percent from May 2011. Meanwhile, non-food sales were 1.7 percent lower than in the previous year.
During the January to May period, retail sales gained 0.3 percent in real terms and advanced 2.3 percent in nominal terms.
Easing oil prices and favorable wage negotiations is expected to underpin consumer spending going forward. Germany's EU harmonized inflation fell to 2 percent in June from 2.2 percent in May.
The Ifo institute yesterday lifted Germany's growth outlook to 0.7 percent from 0.4 percent. Likewise, Bundesbank raised its 2012 estimate to 1 percent from 0.6 percent.
Nonetheless, business sentiment weakened in June to the lowest since March 2010, according to the monthly Ifo survey. Moreover, the number of people out of work increased by 7,000 in June, official data showed.
Elsewhere in France, consumer spending increased more than expected in May. Spending rose 0.6 percent from a year ago, and moved up 0.4 percent from April.
Today, the statistical office confirmed that the French economy stalled in the first quarter. But it expects the economy to pick up slightly in the second half with the GDP rising 0.1 percent in the third quarter and 0.2 percent in the fourth quarter.
For comments and feedback: editorial@rttnews.com