German retail sales surprisingly fell by 0.2 per cent on the month in August but rose strongly from the previous year and economists expected consumer spending to lend the economy increasing support.
On an annual basis, retail sales were up 2.2 per cent in real terms, the Federal Statistics Office said today. Sales also rose 0.9 per cent in the first eight months of the year compared to the same period in 2009.
A return to growth in consumer spending and surging exports powered the German economy to record quarterly growth of 2.2 per cent in the April-June period though economists widely expect the pace of expansion to slow in the second half of the year.
German retailers expect 2010 sales to rise by a 1.5 per cent thanks to accelerating economic growth and falling unemployment, the HDE retailing association said last week.
Official figures released yesterday showed that Germany's unemployment rate fell to its lowest level in more than 18 years in September.
The firm job market, coupled with expectations of higher incomes, has also boosted consumer morale in an economy traditionally driven by its exports.
Consumer morale is likely to rise going into October to its highest level since May 2008, boosted by expectations the economic recovery will lead to higher incomes, the GfK market research group said on Tuesday.
The retail sales data were based on sales in seven states accounting for some 76 per cent of total retail turnover. In nominal terms, sales rose 0.1 per cent on the month and were up 3.3 per cent on the year.
Reuters