German retail sales unexpectedly decline in January

German retail sales unexpectedly fell in January, according to data released by Destatis on Friday.

Retail sales were down 0.8% from December, missing expectations for a 0.2% rise. Meanwhile, December’s figure was revised to show an unchanged reading from an initial estimate of a 0.9% decline.

On the year, sales pushed up 2.3% in real terms.

Pantheon Macroeconomics said: “A sluggish start to the year for German consumers, but the headline is slightly less downbeat if we factor in the upbeat revisions of the December data. Working-day adjusted sales, however, fell 0.6% year-over-year which is the worst performance since 2013. This doesn’t mean much given the volatility of these data, but it puts us on alert in coming months.

“Overall, we think German consumers’ spending will slow this year, but low unemployment and positive real wage growth should ensure that private spending remains robust. Year-over-year growth in retail sales of about 1.2% should be doable in Q1, implying a decent 0.5% quarter-on-quarter jump. We caution, though, that these data are not good indicators for consumers’ spending in Germany.”