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Euro Zone Retail Sales to Shrink for Second Month in August
Monday, 05 October 2009 02:38:33 GMT  |  Ilya Spivak, Currency Analyst
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Euro Zone Retail Sales are expected to shrink for the second consecutive month in August, slipping -0.5% to bring the annual pace of contraction to -2.4%, the fastest since May. German retail sales proved disappointing last week despite apparent improvement in the employment situation as the jobless rate unexpectedly fell to 8.2%, supporting our skepticism about Germany’s spending climate ahead of the release and hinting the broader currency bloc may follow the path of its largest economy. Indeed, unemployment rose to a decade-high 9.6% in August and is expected to continue higher to hit 11% by the fourth quarter of 2010, amounting to tremendous headwinds for retail activity especially as some government support schemes (such as subsidizing employers to keep workers on shortened schedules rather than fire them outright) begin to expire in the very near term.


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