Retail sales in Germany, Europe's largest economy, rose the most in almost two years in August as falling energy costs encouraged household spending.
Sales, adjusted for inflation and seasonal swings, rose 3.1 per cent from July, when they slid 1 per cent, the Federal Statistics Office in Wiesbaden said today.
That's the biggest gain since December 2006. The price of oil has fallen by a third from its record in July. Still, at around $100 a barrel the cost remains a fifth higher than a year ago.
At the same time, a deepening crisis on global financial markets may dim consumers' willingness to spend in coming months.
"Due to lower oil prices retail sales temporarily improved in August," said Arnd Schaefer, an economist at WestLB Equity Markets in Dusseldorf.
"However, as the economy is cooling and against the background of the global financial crisis private consumption won't recover this year.''
In the year, retail sales fell 3 per cent, today's report showed. The July drop in sales was revised from a previously reported decline of 1.5 per cent.
The worst US housing slump since the Great Depression has pushed up the cost of credit globally and roiled financial markets.
The world's biggest financial companies have posted almost $600 billion in writedowns and credit losses since the start of last year after the subprime mortgage market collapsed.
The failure of New York-based Lehman Brothers Holdings and the US rescue of American International Group last month heightened concern about the global financial system and made it costlier for banks to raise funds.
Seattle-based Washington Mutual was seized by regulators last week in the biggest US bank failure in history.
Bloomberg