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Economy in Brief

Euro-Nowhere Man Retail Sales In Europe Are Going Nowhere - But Not Very Fast
by Robert Brusca January 7, 2010

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%
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%
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