Retail sales in Germany for October decreased by 1.5 percent month-over-month, 1.0 percentage points below the consensus and almost reversing September's stronger revised 1.6 percent gain. This was their fist decline since June. Unadjusted year-over-year growth was 3.6 percent, up from 1.4 percent. Nominal sales echoed this trend, with a 1.1 percent monthly drop and a 1.9 percent yearly rise.

The food sector saw a slight 0.1 percent month-over-month real increase and a 0.9 percent rise compared to the previous year. In contrast, non-food retail sales dropped fully 2.2 percent from September but showed a 1.0 percent annual increase, hinting at potential seasonal or discretionary spending patterns.

The internet and mail-order trade sector faced a significant 2.4 percent monthly decline, yet its impressive 8.0 percent year-over-year growth underscores the sustained shift towards online shopping. These findings highlight a mixed retail landscape, where essential goods and e-commerce remain promising. In contrast, traditional non-food retail faces challenges.

Today's update puts the German RPI at minus 42 and the RPI-P at minus 50, meaning that economic activity in general is still running well behind market expectations.

Consumers remain under pressure and retail sales are expected down 0.5 percent on the month.

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. Autos are excluded. A very limited breakdown of subsector performance is available in the initial report which is itself subject to sometimes sizeable revision but much greater detail is provided in the following month's release.

With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. 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. However, by excluding the services sector, changes in retail sales data can differ significantly from those in total household spending.