Global| Jan 07 2010Euro-Nowhere Man Retail Sales In Europe Are Going Nowhere - But Not Very Fast
Summary
While governments around the world have taken strides to pump up expenditures to keep economies going the consumer, largely, is still not on board, at least not in Europe. Total Euro-Area consumer spending is down by 0.3% in November [...]
While governments around the world have taken strides to pump up expenditures to keep economies going the consumer, largely, is still not on board, at least not in Europe.
Total Euro-Area consumer spending is down by 0.3% in November after being down in earlier months…seventeen down months in a row in fact. Over three months the pace of contraction in Euro-consumer spending remains about the same as over six months and only a bit less than over 12-months.
Even motor vehicle registrations that had bumped up on special government assistance plans across the various Zone countries fell in off in November. German retailers continue to be hard-hit and to look for a return of the consumer there.
Overnight Australia reported a 1.4% kick to November sales, one of the few places besides the US where the consumer seems to be aware that he has a wallet in his pocket or a purse over the shoulder.
Sustained recovery will require a return of the consumer. Even in Europe the consumer is large proportion of GDP. Right now Europe continues to benefit from export led growth; China pushes export led growth; Japan pushes export-led growth. But for all that to work, the European consumer, and Japanese consumer will have join in. The consumer in the US appears to be back in gear but there is not enough there to feed the global economy with US retail demand. The world economy needs balance. Other countries must get their consumers in gear because ‘everyone wants’ to sell to the US but ‘everyone also wants’ the US trade deficit to shrink and these two ‘everyone wants’ are in deep conflict with each other. So if ‘anyone wants’ logic and consistency something will have to change.
| Euro-Area Retail Sales | |||||
|---|---|---|---|---|---|
| M/M | Saar | ||||
| Oct-09 | Sep-09 | 3-Mo | 6-MO | 12-Mo | |
| Zone Total Value | -0.2% | -0.2% | -2.6% | -2.4% | -3.9% |
| Food,Bev Tobacco | -0.1% | -0.2% | -1.8% | -2.1% | -2.1% |
| Registrations: | |||||
| Motor Vehicle Reg | 0.3% | 6.7% | 9.6% | 3.5% | 26.9% |
| NonFood Country detail: Volume | |||||
| Germany Value | 0.0% | 0.6% | -2.1% | -3.6% | -2.7% |
| UK(EU) Volume | 0.6% | 0.4% | 2.9% | 5.3% | 3.1% |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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