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Economy in Brief
Japan’s METI Sector Indexes Rebound But Still Lag
Japan's economy continues to fight for revival...
U.S. Existing Home Sales Continue to Weaken, Dragging Down Prices
The NAR reported that sales of existing homes during September declined 3.4% to 5.150 million...
Canadian Retail Sales Weaken As Inflation Slows
Canada's retail sales show relatively widespread deceleration...
U.S. Leading Economic Indicators Strengthen
The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (7.0% y/y) during September...
Philadelphia Fed Manufacturing Growth Continues; Pricing Pressure Eases
The Philadelphia Federal Reserve reported that its General Factory Sector Business Conditions Index dipped to 22.2 during October...
by Robert Brusca September 5, 2007
Euro area sales trends point lower. Food as well as nonfood trends are on the decline. These trends are weighted significantly toward the trends for Germany where the recent deterioration is severe. The UK (an EU not EMU member) and France on the other hand still have relatively strong trends in force.
Detailed data lag by one month but they show weakness in household items, books and other spending. Pharmacy and textile spending has held up.
We can calculate the growth in the new quarter which is one month old by assessing the July growth rate of sales over the Q2 average and annualizing it appropriately. In Q3 total retail sales volumes in the Euro area are growing at a 1.2% pace; for nonfood items the pace is 2.2%.
We are past the point of being able to blame Germany’s VAT tax for the weakness. Year/year measures will still be impacted by that effect but three-month trends are free from it and they are weak. Germany has not been able to engage its consumer in the recovery. So far that has not been a problem since having an industry-led recovery is normal for Germany. But now, just when the consumer is expected to show up, the financial turmoil could keep the wary Germany consumer away. Italy already is weakened. France is ripe for a slowdown and, after some real post election euphoria, Europe faces question marks over the future of consumer spending.
| Jul-07 | Jun-07 | May-07 | 3-Mo | 6-Mo | 12-Mo | |
| Zone-13 Total | 0.1% | 0.6% | -0.8% | -0.5% | 1.6% | 0.7% |
| Food | 0.2% | -0.1% | -0.8% | -2.7% | 0.2% | -1.2% |
| Non-food | -0.1% | 1.0% | -0.8% | 0.8% | 2.7% | 2.1% |
| Textiles | #N/A | 2.8% | -3.5% | 2.8% | 2.6% | 4.0% |
| Household Goods | #N/A | 1.4% | -0.4% | 0.1% | -2.2% | 3.5% |
| Books news | #N/A | 1.3% | -0.9% | 0.8% | 1.5% | 2.7% |
| Pharmaceuticals | #N/A | 0.1% | 0.5% | 2.9% | 2.3% | 3.0% |
| Other Non-special Goods | #N/A | 1.2% | -0.8% | -1.7% | -1.2% | 0.1% |
| Mail Order | #N/A | -0.2% | 1.3% | 7.3% | -5.5% | 0.1% |
| Non-Food Country Detail: Volume | ||||||
| Germany | -0.6% | 2.8% | -4.3% | -8.5% | 6.9% | 0.7% |
| France | #N/A | 1.1% | 0.1% | 5.4% | 6.1% | 6.1% |
| Italy (Total Value) | #N/A | 0.0% | -0.2% | -3.0% | -1.8% | -1.2% |
| UK (EU) | 0.9% | 0.9% | 0.4% | 9.1% | 10.1% | 8.0% |
| 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. | ||||||
