January 5, 2018 / 9:15 AM / a year ago

UPDATE 1-Rising German retail sales point to strong private consumption

* Retail sales up 2.3 pct m/m in November, gain 4.4 pct y/y

* Stats Office estimates sales rose 2.7-3.1 pct in 2017

* Full-year rise is strongest in two years in real terms (Adds details, context)

By Michelle Martin

BERLIN, Jan 5 (Reuters) - German retail sales surged more than expected in November and were estimated to have risen sharply in 2017 overall, data showed on Friday, boosting hopes that private consumption propped up growth in Europe’s biggest economy last year.

Germans revelling in record-high employment, a secure job market, rising wages and low borrowing costs are casting their traditional thriftiness aside to spend more, helping private consumption replace exports as the main growth driver.

Retail sales - a volatile indicator that is often subject to revision - rose by 2.3 percent on the month in real terms, the Federal Statistics Office said. That beat the Reuters consensus forecast for a 1 percent increase and represented a rebound after a 1 percent fall in October.

Sales for the month were 4.4 percent higher in real terms than a year earlier, the data showed, overshooting a Reuters consensus forecast for a 2.5 percent increase.

The Statistics Office estimated that retail sales increased by between 2.7 percent and 3.1 percent in 2017 overall when taking inflation into account. That would be the strongest increase in two years.

In nominal terms, sales growth was estimated to be between 4.5 and 4.9 percent on the year. That would be the biggest increase since records began in 1994.

The government has said economic growth was probably strong in 2017 and it expects household spending to continue rising as incomes and employment keep increasing.

Early indicators suggest retail sales should have a strong start to 2018 too - a survey by market research group GfK in late December showed consumers felt more optimistic heading into January, unperturbed by German political parties’ failure to form a new government.

In addition, negotiated wages for around 17 million German workers climbed by 2.3 percent in 2017 - stronger than inflation - boosting their purchasing power. (Reporting by Michelle Martin; Editing by Paul Carrel)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below