Eurozone retail sales jump 0.9 percent in April
Tuesday, June 7, 2011
BRUSSELS (AP) — Retail sales in the 17 euro countries rose by more than anticipated in April despite concerns about the debt crisis and the European Central Bank’s first interest rate rise in nearly three years.
Eurostat, the EU’s statistics office, said Tuesday that retail sales rose by 0.9 percent in April from the previous month. That was three times the 0.3 percent expected by analysts and made up for an equivalent decline in March.
For the recovery to become more self-sustaining, analysts say consumers have to start spending more on goods and services. So far, the economic recovery from recession in the eurozone has been based on a big industrial rebound, with Germany’s exporters doing particularly well.
Tuesday’s figures will boost hopes that consumers, particularly in Germany and France, are not as cautious as before and will contribute to economic growth in the second quarter of the year. In the first quarter, the eurozone economy grew by an unusually strong 0.8 percent, largely on the back of the eurozone’s two biggest economies.
However, analysts remain skeptical about the prospect of a consumer-led recovery. They note that April’s figures were likely distorted by the late timing of Easter, wage growth remains weak, inflation above target and austerity cuts have yet to hit a number of countries.
Moreover, the prospect of more interest rate rises from the European Central Bank is likely to weigh on consumption rates. The ECB is expected to raise its benchmark rate another quarter of a percentage point to 1.5 percent in July.
“In all, then, there are few signs that consumer spending in Q2 will have been much stronger than that in Q1 (when it fell 0.1 percent),” said Emilie Gay, European economist at Capital Economics.