BERLIN Feb 28 German retail sales posted their
strongest gain in seven years in January, reinforcing
expectations that consumer spending will support growth in
Europe's largest economy this year.
Data from the Federal Statistics Office on Friday showed
retail sales rising 2.5 percent in both real and nominal terms
compared to December, when they stumbled 2.1 percent lower in
real terms during the important Christmas shopping season.
The January rise was the biggest increase since February
2007 and beat forecasts for a gain of 1.0 percent..
Retail sales data are notoriously volatile and tend to be
heavily revised. Economists have also said they are not a good
indicator of consumption as Germans appear to be spending their
money elsewhere than at traditional retailers.
Despite pointing to mitigating factors, such as the weak
December data and a cold weather spell in January leading to the
purchase of winter clothes, Christian Schulz of Berenberg said
the data bode well for German growth.
"The outlook for consumption in Germany is bright and the
January data hint at the potential," Schulz said. "A strong
labour market, low inflation and an improving economic outlook
give households the confidence and means to spend more."
Separate data on Friday showed that wages for workers
governed by labour agreements - roughly half the workforce -
rose by an average 2.4 percent year on year in 2013, another
signal that the wages could support consumption in a low
interest rate environment.
The 2013 rise compared to increases of 2.7 percent in 2012
and 1.7 percent in 2011.
That data contrasted with figures from last week showing
real wages - including those outside of labour agreements - fell
for the first time in four years last year, due partly to a
decline in bonuses and one-off payments.
(Reporting by Annika Breidthardt; Editing by Noah Barkin)