German retail sales fell at their fastest pace in more than four years in August, data showed today, suggesting unease about the euro zone debt crisis prompted some consumers to delay big-ticket purchases.
The preliminary figures, which are notoriously volatile, showed sales tumbling 2.9 per cent on a monthly basis in real terms, much more than the 0.5 per cent decrease expected by economists.
The data sent the euro lower against the dollar.
"The uncertainty surrounding the European debt crisis weighs on consumer sentiment," said Christian Schulz from Berenberg Bank. "Households may postpone some purchases of durable goods. Germany will only fully enjoy higher domestic demand once this uncertainty is lifted."
Germany has been one of the industrialised world's star
performers since the end of the financial crisis, and its swift recovery has helped stimulate its trade partners.
Recent figures, however, show clouds gathering on the horizon for the country's export-geared economy.
While some leading companies continue to voice optimism about their business outlook - reflected in unemployment rates that continue to fall to new post-reunification lows - a growing number are expressing concern.
German economic growth slowed in the second quarter to just 0.1 per cent and economists are worried about weaker export markets and consumer reluctance to spend in the face of the debt crisis.
Private consumption contracted in the April-June period for the first time since 2009, wrongfooting economists who had grown to count on households providing a welcome boost to the economy.
Most had assumed Germans would start shopping again in the July-September period, but the abrupt turn for the worse that the debt crisis has taken has hit confidence across the globe.
In step with doubts about European policymakers' commitment to tackling the crisis, German consumer morale as measured by the GfK research group fell steadily over the summer, settling at a year-low heading into October.
The survey showed that, while Germans seem increasingly confident about their personal income, worries about what may happen in the months ahead was leading them to signal a reluctance to spend.
Reuters
