Spain's Retail Sales Sink in June

The chart shows how mightily Spain's retail sales have fallen. The chart plots an index of real retail sales; it is not a plot of a growth rate. We can see that, in recent months, sales are stirring, but also that they are only a shadow of their former selves.

The table shows that over 12 months real sales are up by 0.2%. That is all the gain that is left after a 0.7% drop in real sales in June. Nominal sales in June fell by 0.2%.

The real and nominal sequential growth rates show that despite the setback to sales in June, Spain's retail sales have a near-term legacy of increases despite their small year-over-year gain. The real three-month and six-month growth rates for sales are at 5% and 6%. Those are very strong growth rates.

Spain has been making progress. Its unemployment rate is lower by seven-tenths of a percentage point over six months and by 1.1 percentage points over 12 months. Over the last year the number of unemployed has dropped by over 300K and by nearly 200K over just the last six months.

Still retail sales have been slow to fire up. Spain was devastated by a building boom that collapsed in the recession and that left it with a different set of circumstances to dig out from under than most of the EMU nations. Spain has been doing just that, digging its way out. Its harmonized unemployment rate still hovers above 25%, an enormous level. Yet, Spain is making progress, not just bandaging old wounds. Government incentives have helped to boost auto sales. But for Spain's recovery to continue, the rest of the euro area will have to continue to make strides. Many hopes are tied to the new lending program from the European Central Bank; Spain's are among them.