January 5, 2012
The euro zone's three largest economies deteriorated as 2011 came to a close, led by declines in German retail sales and French consumer confidence and another increase in Italian unemployment.
Germany recorded its second consecutive month of falling retail sales in November, according to federal statistics office Destatis, with the reading coming in sharply below expectations. But the statistics agency said November's numbers would probably be revised upward.
Retail sales fell 0.9% during the month, according to calendar- and seasonally adjusted data, after a 0.2% decrease in October, the first consecutive monthly drop-off since the first quarter of 2011. Analysts said retail sales in the euro-zone's largest economy seem poised for an overall contraction in the fourth quarter. Economists' forecast had been for a 0.5% increase.
Analysts suggested the data were more likely the result of contagion from the euro-zone's debt crisis rather than a sign of a severe downturn in domestic demand.
"We don't rule out that German household spending will be affected by spill-over effects of the debt crisis. However, given the positive picture for domestic activity, we don't expect a collapse in consumption anytime soon," wrote Annalisa Piazza of Newedge Strategy. In annual terms, retail sales increased 0.8% from the year-earlier period.
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