German Retail, Jobless Data Raises Hopes For Robust Private Consumption
Germany's unemployment rate hit a new record low in March and retail sales rose on the month in February, data showed, in a boon for expectations that private consumption will support growth in Europe's largest economy this year.
Domestic demand is expected to be the sole driver of growth this year in Germany, traditionally an export-driven economy, as exporters face a global slowdown, trade disputes and uncertainty related to Britain's expected departure from the European Union.
Data from the Labour Office showed the unemployment rate dropped to 4.9% in March from 5.0%, hitting the lowest since German reunification in 1990.
The number of people out of work decreased by 7,000 to 2.231 million, seasonally-adjusted data showed. That compared with the forecast for a drop of 10,000.
Separate data from the Federal Statistics Office showed retail sales - a volatile indicator often subject to revision - rose by 0.9% on the month in February, confounding expectations for a drop of 0.9%. They increased by 4.7% on the year.
Record-high employment, hefty pay hikes, moderate inflation and low borrowing costs have been encouraging Germans to splash their cash.
But a GfK survey earlier this week dampened spirits by showing consumer morale deteriorated unexpectedly heading into April, with propensity to buy dropping to its lowest level in more than two years.
The economy narrowly avoided a recession last year and the Ifo institute earlier this month slashed its 2019 growth forecast for the German economy to 0.6% from 1.1% due to weaker foreign demand for industrial goods and increased headwinds for exporters.
The Economy Ministry has said the economy had a subdued start to 2019 and probably grew only moderately in the first quarter.