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Economy in Brief

German Retail Sales Turn Sharply Higher
by Robert Brusca  May 31, 2012

One again Germany is distancing itself from the pack. Its retail sales are accelerating and its unemployment rate in May has fallen to its lowest rate in two decades. Meanwhile retail sales elsewhere in the Zone are limping and unemployment rates in the rest of the zone are high and rising and in several countries well over 20%.

Germany is not just an island of stability in the Euro-Area it seems to be something quite a bit more unique than that. For the UK and Spain retail sales growth rates are falling in the new quarter while sales are rising rather strongly in Germany according to real or nominal measures. German car registrations are lagging but retail sales are doing well.

German Real and Nominal Retail Sales
Nominal Apr
12
Mar
12
Feb
12
3Mo 6Mo 12Mo YrAgo QTR
SAAR
Retail Ex auto 0.7% 1.8% 0.2% 11.3% 4.1% 3.2% 3.3% 12.3%
Car Registrations (units) -5.5% 8.5% -1.8% 2.8% -0.7% 3.4% 8.4% -5.0%
Real Apr'12 Mar'12 Feb'12 3Mo 6Mo 12Mo 3.3% SAAR
Retail Ex auto 0.6% 1.6% -0.7% 6.3% 1.4% 1.4% 1.8% 9.1%
Other Early Reporters
UK Nominal -2.8% 2.0% -0.4% -4.6% -1.1% 0.4% 6.1% -9.1%
UK real 0.0% 2.0% -0.8% 0.3% -4.6% -1.2% -1.1% -7.6%
Spain RetailXAuto -5.4% -0.9% 1.6% -17.8% -8.9% -8.8% 2.6% -28.8%

We can also assess retailing according to the detailed EU Commission indices that were just released, as well. According to these surveys, Germany has the strongest retail sales sector with the sales diffusion metric in the 53rd percentile of its ranked queue of observations. Next highest is the UK at the 25th percentile after that are Greece and Italy at the 20th percentile. Lower still is Spain (13th percentile) France and Portugal both, at or below, their respective 6th percentile. One again Germany is head and shoulders stronger than the pack

Sales are weaker than this in Germany about 53% of the time according to the survey. Sales are weaker than this less than 6% of the time in France and Portugal.

The consumer side of the economy does not seem to be in a leadership role to spur recovery. However, the revival of sales in Germany is a hopeful development. As a counterpoint there are still severe issues that need to be attended to in Europe. Spain’s deficit situation has just been cut some slack by the EU Commission. But Spain’s banking system is a very worrisome thing. Spain is way too big to fail and it is also too big to be bailed out. Europe is once again talking about some sort of a deposit insurance scheme to try and stem capital flight from weakened national banking systems and banks. But there seems to be no agreement on how to proceed or even if to proceed. The slight revival of German retail sales is thin gruel against the mounting problems in the euro-zone.

EMU Retail Sectors and Country level Performance
Retail May
12
Apr
12
Mar
12
Feb
12
%ile Rank Queue
Rank %
Retail Confidence -18 -11 -12 -14 24.1 223 11.9%
Present Biz Sit -24 -12 -12 -14 22.2 224 11.5%
Vol Stocks 17 13 16 17 50.0 75 70.4%
Expected Biz Sit -13 -9 -9 -11 32.6 219 13.4%
Orders Placed -19 -15 -16 -16 33.3 232 8.3%
Employment Expect -7 -6 -4 -7 36.4 176 30.4%
By Country
Germany -14 -4 -2 -7 44.0 119 53.0%
France -20 -9 -17 -15 19.2 237 6.3%
Italy -27 -20 -19 -22 47.0 201 20.6%
Spain -24 -21 -22 -22 26.8 218 13.8%
UK(EU) -7 -3 -15 -7 57.9 189 25.3%
Greece -35 -38 -36 -39 11.7 201 20.6%
Portugal -23 -24 -25 -25 16.5 239 5.5%
Since May-91 253 -Count  
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