| BERLIN, March 31
BERLIN, March 31 German retail sales
unexpectedly jumped in February, data showed on Monday, marking
the second consecutive monthly increase and pointing to a strong
rise for the quarter that would boost overall growth in Europe's
Data from the Federal Statistics Office showed retail sales
rose 1.3 percent in real terms on the month, beating even the
highest forecast in a Reuters poll of economists for a gain of
0.8 percent. The consensus forecast was for a 0.5 percent fall.
"The figures were much stronger than expected, a further
signal for strong growth in the first quarter," said economist
Holger Sandte at Nordea. "Consumption should be a central pillar
of support of growth this year."
The indicator for retail sales is notoriously volatile,
however, and the figure for January was revised down to a rise
of 1.7 percent from an originally reported 2.5 percent. For a
table of the data, click on
Christian Schulz at Berenberg bank said the data put sales
on track for a rise of 1.6 percent in the first quarter.
"That would be the biggest increase in retail sales since Q4
2009, when the post-Lehman recovery started in earnest," he
said. "Then, as now, returning confidence combined with strong
fundamentals and low inflation to deliver a strong rebound after
a period of weakness."
Wage negotiations promised generous pay increases for
households, he added, which will likely boost consumption.
Market researcher GfK has said workers in pay negotiations
were likely to get increases of 3 percent or more this year.
Trade union Verdi heads into the third round of negotiations on
wage rises for public sector workers on Monday. It wants a total
increase equivalent to around 6.7 percent.
Berlin has relied on domestic demand to bolster growth over
the past year as a weak global outlook and the euro zone crisis
weighed on exports, traditionally the driver of the German
But uncertainty also dampened spending at home last year,
and the economy grew just 0.4 percent. Economists and the
government expect expansion of around 1.8 percent in 2014,
thanks to robust private consumption and a pickup in investment.
A GfK survey last week showed German consumer morale held
steady going into April as shoppers were more upbeat about the
economic outlook, but their mood could worsen if the Crimea
crisis spreads and leads to tougher sanctions from the West.
GfK expects private consumption spending will increase by
1.5 percent in real terms this year.
(Additional reporting by Rene Wagner; Editing by Stephen Brown)