Reply #26: here's your SURPRISE report: Germany’s Retail Sales Declined More Than Economists Forecast in August [View All]

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http://www.bloomberg.com/news/2011-09-30/german-retail-sales-drop-most-in-more-than-four-years-on-crisis-concerns.html

German retail sales declined the most in more than four years in August as concerns about the economic impact of Europe’s sovereign debt crisis sapped consumers’ willingness to spend.

Sales, adjusted for inflation and seasonal swings, slumped 2.9 from July, when they rose 0.3 percent, the Federal Statistics Office in Wiesbaden said today. That’s the biggest drop since May 2007. Economists forecast sales would fall 0.5 percent, according to the median of 18 estimates in a Bloomberg News survey. Sales rose 2.2 percent in the year.

The debt crisis is threatening to tip Europe back into recession, damping confidence even as falling German unemployment boosts household purchasing power in Europe’s largest economy. While a possible Greek default has clouded the outlook, the Bundesbank still predicts a “robust” third quarter and growth of about 3 percent this year.

The retail sales figures “are volatile and don’t reflect that the trend remains positive as consumer confidence is actually holding up relatively well,” said Christian Schulz, an economist at Joh. Berenberg Gossler & Co in London. “However, the crisis may prompt households to postpone some big-ticket purchases this winter.”