Eurozone retail sales drop less than expected in August

Retail sales in the 19 countries that share the euro fell less than expected in August, according to the latest figures from Eurostat.

Retail sales dipped 0.1% from July, beating expectations of a 0.3% decline. On the year, however, they were up 0.6%, missing forecasts of a 1.5% increase.

Sales of automotive fuel were up 0.2% in the eurozone, while sales of food, drinks and tobacco fell 0.4% and non-food products were down 0.1%.

In the EU-28 group of nations, sales were 0.1% weaker on the month and 2.1% higher on the year.

Eurostat said on Wednesday that eurozone retail sales in July rose 0.3%, which was down from an initial estimate of a 1.1% increase. The figure for the year was also revised down, to a 1.8% gain from 2.9%.

Pantheon Macroeconomics said the headline was relatively upbeat compared to consensus, but the key story was the significant downward revision of the July data, due to a downward adjustment in the final German data.

“This points to a subdued outlook for EZ retail sales growth over Q3 as a whole compared to our initial estimates. Assuming a year-over-year rate of 1.5% in September, retail sales will rise 0.4% quarter-on-quarter in Q3, up only marginally from the disappointingly weak 0.2% in Q2. Consumers’ spending in the Eurozone continues to support growth, but momentum has waned.”