Euro Area retail sales sharply down in March 2011

In March 2011, euro area retail sales collapsed. A bad news for growth and another proof of the weakness of economic activity in the area.

Euro Area retail sales sharply down in March 2011
In March 2011, retail sales in the euro area are sharply down, -1.0% month-on-month in real terms (+0.3% MoM in February). It is the sharpest fall in expenditures since April 2010. In 2011 Q1, sales are down by 0.1% over the quarter, after -0.3% in 2010 Q4. On a annual basis, retail sales for the whole euro area are declining by 1.7% (worst since the end of 2009).

As the chart shows, this part of household consumption has made no progress since the end of the Great Recession (2009 Q2).

In main countries, retail sales dropped everywhere: in Germany (-2.1% MoM), In Spain (-1.4%) and in France (-1%). The greatest decline was recorded in Portugal in March (-4.7% over the month).

Economic Impacts
Although this indicator only covers a small part of total expenditures (do not include cars and consumption in services), it is a trend indicator. And the contraction in retail sales in 2010 Q4 and 2011 Q1 are not pointing in the good direction for euro area GDP growth.

Market Impacts:
Forex: Just after the publication, EUR/USD is only slightly down. The EUR/GBP is more affected, falling from 0.903 to 0.900.
Commodities: Gold and WTI oil price are down a bit to 1535 $/oz and 110.5$/b.


Wednesday, May 4th 2011

World Economic Snapshot
CB 0.25% 1.50% 6.56% 0.1% 0.5% 1% 0.25% 12.25%
GDP 2.3% 2.5% 9.8% 2.5% 1.8% 2.9% 2.4% 4.2%
Price 3.6% 2.7% 5.5% 0.3% 4.5% 3.3% 0.3% 6.1%
UR 9.2% 9.9% - 4.7% 7.7% 7.4% 3.0% 6.0%

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