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German Unemployment Stable, Retail Sales Pick Up

James Boston
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German Unemployment Stable, Retail Sales Pick Up

Germany’s Department of Labour has just published the September update to the country’s Unemployment rate, the seasonally adjusted headline figure remains once again at the 6.7% level it has been holding at since the start of this year, there was no material expectation for any change in this figure today. The actual Unemployment Change figure is recording a rise of 13K compared to the moderate increase of 1K in August, there was an expectation today that the figure would drop by approximately -2K.

Earlier this morning the German Statistics Office updated the Retail Sales figures for the month of August and there is some signs of a healthy pick up within the domestic economy. August recorded a month on month growth in Retail Sales of 2.5%, this surprised analysts that had been expecting a more moderate recovery of 0.5% following on from July’s -1.1% drop. On a year on year basis the Retail Sales number has expanded 0.1%, this is clearly lower than the July number of 1.1%, which has just been revised upward, but beats the market estimate of a -0.2% drop.

Today’s month on month rise in the Retail Sales number is the highest that Germany has experienced in almost three years, this is showing signs that there is still hope for a consumer lead recovery in the Eurozone’s largest economy. A breakdown of the Retail Sales categories shows that much of the boost to the figures came from non essential items, this points to confidence within the consumer sector as purchases that had been postponed are now taking place. Job stability and gradually rising incomes are the major contributing factor to increased consumer spending, however a sharp pick up such as that seen this morning is generally caused by either an increase in underlying confidence or deep discounting by retailers.

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