DE: Retail Sales

Tue Mar 31 01:00:00 CDT 2015

Consensus Actual Previous Revised
Month over Month -0.7% -0.5% 2.9% 2.3%
Year over Year 2.6% 5.3% 5.0%

Retail sales fell slightly less than expected in February but only after January's sharp increase had itself been revised down. Even so, a 0.5 percent monthly drop in volumes was only the first decline since last September and hardly dented a cumulative rise of 3.4 percent in December/January. Unadjusted annual sales growth almost halved in February to 2.6 percent.

Despite February's reversal average sales in January/February were still 2.9 percent above their fourth quarter average and even a flat performance in March would be enough to see first quarter growth of 2.8 percent.

The recovery is household demand is consistent with the strong improvement in consumer confidence found in recent GfK and, to a somewhat lesser extent, EU Commission surveys. Moreover, both reports showed sentiment also strengthening significantly this month so, for now at least, it looks as if developments in the German consumer sector will be good news for the national and Eurozone economies alike.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data are compiled from about 27,000 retail businesses and are reported in both nominal and volume terms.

With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. Both the Federal Statistical Office and the Bundesbank publish retail trade data. Until recently, there were vast differences between them, primarily because they each used a different seasonal adjustment program. This difference ended when the Statistical Office began using the U.S. Census Arima X12 methodology as well as their Berlin method. Another difference is that the Federal Statistical Office data are generally for total retail sales while the Bundesbank data features sales excluding autos and petrol stations or excluding only autos. The data here are for total retail sales.

The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.