* June retail sales up 0.4 pct month/month and 2.4 pct
* Annual rise in euro zone strongest since March 2007
* Germany, France see fastest year/year rise since February
* For TABLE pls see
(Adds analyst, details)
By Martin Santa
BRUSSELS, Aug 5 Euro zone retail sales rose at
the fastest rate in seven years in June - and twice as fast as
expected - thanks to strong sales of both food and non-food
products, data showed on Tuesday.
Compared with the same period last year, the volume of
retail sales in the 18 countries sharing the euro surged by 2.4
percent after a downwardly revised 0.6 rise in May, posting its
strongest growth since March 2007, data from the EU's statistics
office Eurostat showed.
Retail sales, a proxy for household demand, rose in line
with expectations by 0.4 percent on the month in June after an
upwardly revised 0.3 percent rise in May, data showed.
The annual rise was driven by a 3.0 percent increase in
sales of non-food products such as electronics, computers, books
or textiles, followed by a 2.0 percent increase in the volume of
sales of food, drinks and tobacco.
The fragile recovery of the 9.6 trillion euro economy has so
far been mainly export-driven but Europeans, still worried about
future job and economic prospects, seem to have started spending
The European Central Bank, which is expected to take no
action on Thursday in response to a surprise drop in July
inflation, saw domestic demand gradually increasing its
contribution to the economic growth Europe, which remains weak.
The bloc's two largest economies - Germany and France - both
saw retail sales rise at the fastest pace, year-on-year, since
Analysts saw modestly improving labour markets in most
countries and very low consumer price inflation providing some
support to consumer spending over the coming months and help
euro zone recovery to gradually gain traction.
"Even so, July's second successive dip in confidence
reinforces suspicion that euro zone consumers are generally
likely to be pretty careful in their spending for the time
being," said Howard Archer, chief European economist at IHS.
While joblessness in the euro zone fell in June to its
lowest level since September 2012 and inflation remains in the
'danger zone' of below 1 percent since October last year,
consumer confidence deteriorated in July.
Eurostat will publish euro zone GDP growth flash estimate
for the second quarter on Aug. 14
(Reporting by Martin Santa; Editing by Jeremy Gaunt)