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Economy in Brief

German Retail Sales Run Soft
by Robert Brusca October 31 2008

The German consumer has kept a stiff upper lip according to the November reading on the consumer from GfK. Still the consumer has been stiffening more than just his and her lip. The old wallet seems to have become a bit less pliable as Germans have tightened up on spending. Retail sales plunged in September, dropping by 2.5% and obliterating the 2.4% pop in August. The drop will still leave NOMINAL German retail sales advancing in Q3 but real ex auto German sales are shrinking in Q3 at a 0.5% annual rate.

The sequential growth rates on German nominal retail spending are very flat. The real retail sales ex auto sequential growth rates are similarly steady but at shallow negative rates of growth.

The good news for Germany is that the September drop in retail sales can be called a plunge but it only offsets the spike in August. There is nothing in the data or trends that suggest things are about to get much worse. But that does not mean that they won’t either.

German Real and Nominal Retail Sales QTR
Nominal Sep-08 Aug-08 Jul-08 3-MO 6-MO 12-MO YrAgo Saar
Retail Ex auto -2.5% 2.4% 0.2% 0.0% 0.8% 0.8% 0.4% 2.2%
Food, Bev & Tobacco -1.6% 3.1% -0.2% 5.0% 0.4% 0.9% 0.0% 2.6%
Clothing footwear 8.7% -1.2% 4.1% 56.7% 30.0% 0.6% 18.5% 10.8%
Retail Ex auto -2.3% 1.9% -0.1% -2.0% -1.4% -2.1% -0.6% -0.5%
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