German retail sales rebound with bigger-than-expected jump in April

BERLIN, May 30 (Reuters) - German monthly retail sales rose more than expected in April after four consecutive drops, data showed on Wednesday, suggesting that household spending will support growth in Europe’s biggest economy in the second quarter.

The volatile indicator, which is often subject to revision, showed retail sales rose by 2.3 percent on the month in real terms, the Federal Statistics Office said. It was the strongest monthly increase since October 2016.

That was much stronger than the Reuters consensus forecast for a 0.7 percent rise and followed an upwardly revised drop of 0.4 percent in March.

On the year, retail rose by 1.2 percent, slightly weaker than the Reuters consensus forecast for a 1.3 percent increase.

Private consumption has been a key growth driver in recent years as German consumers benefit from record-high employment, rising real wages, strong job security, moderate inflation and low borrowing costs.

In the first quarter, household spending contributed 0.2 percentage points to a quarterly expansion rate of 0.3 percent.

The retail sales data came after a GfK survey published last week showed the mood among German consumers deteriorated further heading into June to reach the lowest level so far in 2018. (Reporting by Michael Nienaber Editing by Michelle Martin)