· Retails sales trends in EMU/EU countries that seemed like they might have been acquiring some life have turned lower in October. 

· As the first month in a new quarter, the October readings afford us an early look at the speed of sales in the new quarter. We find that retail sales volumes are dropping at a 3.7% annual rate in Q4 in the EMU-13 area. Spending on food is up in the quarter at a 0.1% annualized rate; nonfood items have volumes contracting at a pace of -5.6%. 

· Sequential growth rates for nonfood and overall retail sales have been showing clear deceleration. 

· In Germany sales are weakening fast. In the UK the slowing is itself in slow-motion, but the deceleration is still clear to see. 

· The table below shows that momentum in retail sales volumes has been fading. Europe is slipping regardless of the optimism there. 

Euro area 13 Retail Sales Volume

Oct-07

Sep-07

Aug-07

3-Mo

6-MO

12-Mo

Euro area 13 Total

-0.8%

0.2%

0.0%

-2.2%

-0.6%

0.3%

Food

-0.2%

0.2%

0.2%

0.8%

-1.0%

0.2%

Nonfood

-1.1%

0.2%

-0.2%

-3.9%

-0.4%

0.4%

Textiles

N/A

1.9%

-0.3%

10.9%

7.2%

8.2%

HH Goods

N/A

-1.2%

0.5%

-0.8%

-0.3%

0.9%

Books newspapers & others

N/A

-0.3%

-0.4%

-0.8%

0.7%

1.6%

Pharmaceuticals

N/A

0.6%

0.2%

4.7%

4.2%

4.2%

Other nonspecial store sales

N/A

0.7%

-0.6%

-0.3%

-0.8%

-0.1%

Mail Order

N/A

-0.1%

0.0%

-2.3%

3.7%

3.2%

Nonfood Volume

Germany

-3.8%

0.4%

0.3%

-11.8%

-8.3%

-4.0%

France

N/A

0.5%

-0.4%

2.9%

4.5%

5.2%

Italy (Total Value)

N/A

-0.5%

-0.1%

-2.6%

-2.9%

-2.2%

UK (EU)

0.1%

0.4%

0.7%

4.9%

6.5%

6.7%

Shaded areas calculated on a one-month lag due to lagging data.

The EA 13 countries are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain.