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Economy in Brief

Italy Retail Sales Trends Continue to Erode
by Robert Brusca February 25, 2008

Italy’s retail sales rose in December by a thin 0.1%. The three month advance was at annual rate of 0.4% even below the six month pace of 0.6% and near the Yr/Yr pace of 0.2% - rotten growth rates all. These nominal sales gains clearly imply persisting declines in volume terms. Italy’s nominal retail sales have been in long, slow, declining growth phase.

The chart on the left plots nominal Italy retail sales Vs the EMU volume index for retail sales. The EMU Volume index shows volume plunging at the end of 2007. Italy shows nominal sales steadily eroding with real sales likely falling at an accelerated pace at the end of 2007 since inflation flared at year end as energy prices rose strongly throughout the Euro Area. With the Q4 numbers in, nominal Italian retail sales fell by 0.4% saar in Q4 as food sales advanced by 0.6%. Obviously the Italian consumer is under stress. And that is a theme for the whole of the Euro Area as well.

Italy Retail Sales Growth
Nominal Dec-07 Nov-07 Oct-07 3-MO 6-MO 12-MO YrAgo Q-2-Date
Retail Trade 0.1% -0.3% 0.3% 0.4% 0.6% 0.3% 1.0% -0.4%
Food, Beverages & Tobacco 0.1% -0.1% 0.3% 1.4% 1.5% 1.0% 1.3% 0.6%
Clothing & Fur 0.5% -2.0% 2.1% 2.3% -0.4% -0.9% 1.6% -2.2%
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