German retail sales posted their biggest monthly drop in 2 and a half years in September, falling by 2.3 per cent in real terms, data showed, painting a less upbeat picture of consumer demand than suggested by recent figures.
Sales fell for a second month in a row, today's preliminary figures from the Federal Statistics Office showed, although they stood 1.1 per cent higher in real terms in the year through September compared the same period a year earlier.
Monthly figures for August were revised downward to show a 0.4 per cent fall as opposed to a previously reported 0.2 per cent decrease.
The figures clashed with recent upbeat data that has buttressed hopes Germany's stronger-than-expected recovery will hold up despite the uncertain impact of a fragile global outlook on its traditionally dominant export industries.
Economists watch retail sales and other consumer data closely for evidence of a pick-up in spending, which is expected to lend increasing support to the economy this year and next and partly compensate for easing export growth.
Consumer spending increases, combined with surging exports, powered the German economy to growth of 2.2 per cent in the April-June quarter, and so far economists see private consumption rising by around 1 per cent next year.
But that outlook could brighten given an increasingly sturdy job market, which passed a milestone in October by falling below 3 million in unadjusted terms, hitting its lowest level in 18 years in a development that will reassure consumers.
Economy minister Rainer Bruederle has said domestic demand would make up three quarters of growth next year, a change however that would require sustained gains in retail sales that economists now see as being in doubt.
On an annual basis, sales were up 0.4 per cent in real terms. In nominal terms, sales fell 2.4 per cent on the month but were up 1.6 per cent on the year, yielding a 2.1 per cent increase in the year through September.
The data were based on sales in seven states accounting for some 76 per cent of total retail turnover.
Reuters