* Gov't spending helps economy for first time since end 2009
* Retail sales rose 0.1 pct in July, below expectations
BRUSSELS, Sept 4 A rebound in exports and a
return to spending by households and governments pulled the euro
zone out of recession in the second quarter of this year, data
showed on Wednesday, in the first signs of recovery after the
bloc's longest slump.
Stronger-than-expected growth from Germany to Portugal
helped the euro zone's economy expand 0.3 percent in the
April-to-June period, the European Union's statistics office
Eurostat said in its first breakdown of the data.
Exports to the rest of the world rose sharply in the quarter
after six months of falling sales, while government spending
made its first positive contribution to the economy since late
2009 when Greece plunged the euro zone into its debt crisis.
The softening of the austerity policies that many economists
blame for worsening the euro zone's longest ever recession was
also accompanied by the first quarterly rise in household
spending since late 2011.
Cuts in public sector spending from education to health
aimed to curtail budgets that ballooned during the boom of the
euro's early years, but record unemployment has meant Europeans
are buying less and forcing companies to cut output and staff.
The euro zone's fragility was evident in the muted shopping
of Europeans during July, when retail trade volumes increased
just 0.1 percent, Eurostat said in a separate release.
That was not enough to make up for the 0.7 percent fall in
June and was below economists' expectations for a 0.4 percent
increase in the month.
Economists now expect economic growth to continue in the
third quarter of this year following positive business surveys
in August, but there are few hopes of a rapid recovery.
"We do not interpret a second consecutive solid gain as the
start of a strong upturn," said Christoph Weil, an economist at
Commerzbank. "After all, the imbalances in the periphery have
yet to be fully corrected and several core countries are
increasingly facing problems," he said in a report.