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Economy in Brief

German Retail Sales Rebound in April
by Robert Brusca  May 29, 2015

With the rebound in sales in April, trends in German retail sales show signs of stabilizing. Both six-month and year-over-year trends are starting to snake sideways at firm rates of growth. The three-month pace is still erratic.

Real retail sales excluding autos are up strongly in April, rising by 1.7%. This is after two months of drops. There have been five monthly drops in German retail sales (real sales ex-autos) out of the last 12 months. The series obviously is somewhat `noisy.' But the increases do outnumber the drops and they are generally larger than the declines. That is why the broader trends are showing increases.

Auto registrations in Germany show strong and steady growth over six months and 12 months but demonstrate a sharp falloff over three months.

In the quarter to date (one month into the new, second quarter), German nominal and real sales show strength. But auto registrations are off on this measure.

Other early retail sales reporters include the U.K., France and Portugal. Each of these reports shows a sales gain in April, and all show firm and steady sales growth over six months and over 12 months. The U.K. follows up these trends with further gains over three months. France also shows sales gains over three months but a gain that is weaker. Portugal shows a sizeable drop over three months. These trends translate into solid sales gains early in Q2 for the U.K. and into a large drop for Portugal.

On balance, the consumer sector in Germany seems solid. France is showing some life. The U.K. appears to be strong as well. Portugal has posted another gain in Q1 GDP, but unfortunately it is showing some weakness in retail sales trends. With drops in two of the past three months and an outsized drop in sales in the current quarter, Portugal's success story may be opening to a less advantaged chapter.

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