Global| May 31 2012German Retail Sales Turn Sharply Higher
Summary
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 [...]
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.
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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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