German retail sales (GRIORTMM) unexpectedly fell for a second month in November as Europe’s sovereign debt crisis weighed on the outlook for economic growth.
Sales, adjusted for inflation and seasonal swings, decreased 0.9 percent from October, when they fell a revised 0.2 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 0.2 percent, the median of 13 estimates in a Bloomberg News survey (GRFRIAMM) showed. Sales (GRFRINYY) rose 0.8 percent from a year ago. The statistics office said retail sales were probably between 1.1 percent and 1.3 percent higher in 2011 than in 2010, according to preliminary estimates.
Europe’s debt crisis has clouded the economic outlook for 2012, with the Bundesbank cutting its growth forecast last month to 0.6 percent from 1.8 percent. Still, unemployment at a two- decade low is helping to support consumer confidence, and GfK SE said in December its index of household sentiment will remain at a six-month high this month.
“The data goes against recent trends in leading indicators and fundamental data,” said Christian Schulz, an economist at Berenberg Bank in London. “German households are traditionally cautious, preventing any major consumption boom, but an improvement should be on the cards. Monthly retail sales data is volatile and often subject to significant revisions.”
GfK said on Dec. 20 its gauge of economic optimism rose to minus 0.9 in December from minus 7.2 in November, and an index of income expectations increased to 34 from 31.1. While a measure of consumers’ willingness to spend dropped, GfK said it is “still at a comparatively high level.”
Metro AG (MEO), the nation’s biggest retailer, on Dec. 6 cut its 2011 sales and profit forecast, blaming “the increasingly noticeable effect” of Europe’s debt crisis.
“Private consumption will have a stabilizing effect on the economy as it cools in 2012,” said Ulrike Rondorf, an economist at Commerzbank AG in Frankfurt. “With the positive situation in the labor market, people’s incomes are rising.”
