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Economy in Brief

EMU Retail Sales Tail Off Sharply
by Robert Brusca June 3, 2010

Euro-Area Retail sales broke off from their strong upswing and fell sharply in April. The 1.2% drop cut the Yr/Yr growth rate for sales to 1.0%. Meanwhile motor vehicle sales continued to plummet in the Zone and have fallen at a 22% pace over three-months and by 5.7% Yr/Yr. Motor Vehicle registrations dropped by 11.4% in April.

Germany and the UK among the early reporters show their sales in April each were up. Germany still shows a Yr/Yr sales decline, however, while UK sales are up by 1.7% Yr/Yr. Overall e-Zone sales have had their upward momentum cut.

Also on the day the revised Services PMI indices were released. The EMU index rose more strongly on revision while the UK index showed a meager increase from the previous month.

On one hand the weakness in retail sales suggests that all the problems in Greece and the knock-on effect on worries may have damaged consumer willingness to spend. We have seen the more topical consumer sentiment indices drop off already. But the services sector numbers tell us that economic improvement is still in train –and in the important job-creating services sector. The reality of the improvement should dominate the ephemeral worries except in those countries where real events are under strain such as Greece and possibly in Spain where the fiscal measures will have some bite. We are still waiting on the actions in other nations.

Euro-Area Retail Sales
  M/M Saar
  Apr-10 Mar-10 Feb-10 3-Mo 6-MO 12-Mo
Zone Total Volume -1.2% 0.5% -0.1% -3.1% 1.8% 1.0%
Motor Vehicle Reg -11.4% 3.3% 2.4% -22.8% -16.5% -5.7%
NonFood Country detail: Volume
Germany Value 1.0% -1.6% 1.6% 3.8% -0.6% -1.1%
UK(EU) Volume 0.2% 0.5% 2.4% 13.1% -2.4% 1.7%
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