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Economy in Brief

Germany Retail Sales Give Way…
by Robert Brusca September 1, 2008

German retail sales have now put in back-to-back declines, each of substantial magnitude. Real and nominal sales are now lower over 12 months. Over 6 months the rate of decline is more severe and over 3 months the pace of decline is even more severe. The loss in momentum is unmistakable.

For the current quarter, the results are very poor. It is July, so we calculate the growth RATE in July centered over the average for sales in Q2. There are different ways to annualize things. We compound the growth rate and present it as an actual rate from its current position compared to the actual Q2 base. Since Q2 centers in May we take the resulting growth rate to the 6th power to annualize it. That leaves us with retail sales falling at a 4.3% pace in Q3 or at a -11.3% pace in real terms (ex autos). However if we treat the level of sales in July as the level for the whole quarter we compound by four instead of six giving us a still weak growth rate of -7.7% for real ex-auto sales. There is not much arguing with the notion that German retail sales are falling sharply.

German Real and Nominal Retail Sales QTR
Nominal Jul-08 Jun-08 May-08 3-MO 6-MO 12-MO YrAgo Saar
Retaill Ex auto -1.3% -1.4% 1.7% -4.1% -3.0% -0.2% -0.7% -4.3%
Food Bev & Tobacco -1.6% -1.2% 0.1% -10.4% -5.0% -1.2% -4.3% -13.4%
Clothing footwear 2.8% -10.2% 15.1% 27.4% 1.3% 1.5% 2.1% 0.4%
Retail Ex auto -1.5% -1.4% 1.3% -6.2% -5.4% -3.2% -1.0% -11.3%
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