Eurozone retail sales flat in December

By PAN PYLAS

posted: 7 DAYS 5 HOURS AGO

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LONDON -Retail sales in the 16 countries that use the euro were flat in December from the previous month, official figures showed Wednesday — a further sign that consumers in the eurozone remain reluctant to spend despite the end of the recession.

The figure published by Eurostat, the EU's statistics office, was well below market expectations for a 0.5 percent increase. On a year-on-year basis, sales were down 1.6 percent.

Some of the sting was taken out of the figures by the news that November's 1.2 percent monthly decline was revised to show only a 0.5 percent fall. The euro was mostly unchanged around $1.4010 after the data's release.

Nevertheless, the retail sales figures continue to suggest the recovery from recession in the eurozone will be slow — spending of non-food products fell.

So far, the modest economic growth being recorded has been largely due to a pick-up in global trade volumes, which has boosted exports, particularly in Germany, the single currency bloc's largest economy.

Analysts say that domestic demand will need to take a bigger role for the pace of recovery to accelerate.

"Looking ahead, there are some encouraging signs for consumers — consumer confidence has risen, savings are high and inflation remains low but with unemployment still rising, a strong consumer recovery might be too much to hope for," said Jennifer McKeown, senior European economist at Capital Economics.

In the wider EU, which includes non-euro members such as Britain and Sweden, retail sales slipped by 0.1 percent during the month, for a 1 percent year-on-year decline.

Over 2009 as a whole, retail sales fell 2.3 percent in the eurozone and by 1.7 percent in the EU.

2010-02-03 05:56:49