German retail sales fell by 1.8 per cent month-on-month in June, missing expectations for a slight rise and denting hopes that consumer spending could help support Europe's largest economy.
Sales dropped by 1.6 per cent year-on-year, Federal Statistics Office figures showed today.
The mid-range forecast of analysts polled by Reuters was for retail sales to rise by 0.5 per cent month-on-month and to increase by 0.9 percent year-on-year.
Major use of shortened working hours has reduced job losses in Germany, where unemployment has risen by only 300,000 since the global financial and economic crisis intensified with the collapse of US investment bank Lehman Brothers last September.
The surprise fall in retail sales bucks a recent run of positive reports on the economy and shows consumers are holding down their spending despite a benign inflation environment and signs the economy may be stabilising.
Business morale rose for a fourth month running in July, hitting its highest level since October, and unemployment unexpectedly fell for the first time in nine months.
Many sectors of the German economy - which the government expects to contract by a record six per cent this year - are still suffering acutely from the crisis.
The Statistics Office said retail sales fell 1.6 per cent month-on-month and 2.0 per cent on the year in nominal terms.
The data were based on sales data from seven states accounting for about 76 per cent of retail activity in Germany.
In the first six months of 2009, sales were down by 2.1 per cent in real terms year-on-year.
Reuters