German retail sales rise but miss consensus

German retail sales rose 4.2% in May, missing market expectations but showing a recovery in demand as stores reopened in Europe's biggest economy.

The increase from the month before was lower than the 5% average analysts' forecast.

"The headline points to a jump in demand as reopening got underway midway through Q2, but a modest one all the same," Claus Vistesen and Mel Debono of Pantheon Macroeconomics said.

They said German retail sales had already returned to their pre-virus level and that a big increase from pent-up demand was not likely. Pent-up demand will show in services numbers because spending was severely affected at the end of the first quarter, they said.

"We look for solid gains in overall consumers spending in Q2 and Q3," the economists said.