Eurozone retail sales are set to keep declining over the rest of the year as the effects of tighter monetary policy continue to feed through to consumers, Capital Economics economist Bradley Saunders said Wednesday following the release of July retail sales data from Eurostat. "The big picture is that the outlook for household spending looks poor," Saunders said.
"Consumer confidence is far below its average level of the past decade. And high interest rates and stagnating real incomes should continue to constrain households' ability to spend." Data:
Eurozone Jul Retail Sales -0.2% M/M vs. +0.2% in Jun, Consensus -0.1% Eurozone Jul Retail Sales -1.0% Y/Y vs. -1.0% in Jun, Consensus -1.2%
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Key takeaways from the economist's note:
- The 0.3 percent decrease that was originally reported for June was revised to 0.2 percent growth. - This means that retail sales edged up 0.2% q/q in Q2, rather than flat-lining as was previously estimated - 3-month-on-3-month growth rate rose to +0.5% in July - July's decline was largely due to 0.8% drop in Germany that offset rises in France, Spain and Portugal, perhaps reflecting strength of tourist spending - Other data show that new car registrations increased in recent months, suggesting that households' spending on non-retail items has risen - Expects consumption to fall in H2
