German Retail Sales Rebound Before Partial Lockdown
German retail sales rebounded more than expected in October, suggesting consumers supported overall growth in Europe's largest economy before a partial lockdown to contain a second wave of the coronavirus pandemic.
Germany has ordered restaurants, bars, entertainment venues and gyms to close since 2 November in an attempt to slow the spread of COVID-19. Schools, factories and shops remain open with social distancing conditions.
Retail sales – a notoriously volatile indicator often subject to revisions – rose 2.6% in October on the month in real terms, the Federal Statistics Office said.
That followed an upwardly revised drop of 1.9% in September and compared with a Reuters forecast for a rise of 1.2%.
On the year, retail sales jumped 8.2%, beating a Reuters forecast for a rise of 5.9%. Demand was particularly strong for furnishings and household appliances.
Online retailers continued to benefit from shifting consumer habits with a strong jump in sales, which came at the expense of clothing and shoe stores which suffered further losses.
Compared with February, the month before the pandemic started in Germany, retail sales were 5.9% higher in real terms, suggesting that the sector has already put the crisis behind it.
The better-than-expected retail sales data followed bullish job market data which showed on Tuesday that unemployment fell further in November despite the partial lockdown.
But a gloomy consumer sentiment survey released by the GfK institute last week suggests the resilient labour market will not automatically translate into higher household spending at the end of the year.
Economic institutes expect Germany's gross domestic product to shrink by about 1% in the fourth quarter after a stronger-than-expected 8.5% rebound in the third and an unprecedented 9.8% plunge in the second quarter.