RTTNews - Eurozone retail sales dropped more than expected in May as fears of rising unemployment dampened households' spending intentions.
Retail sales fell 0.4% month-on-moth in May following a revised increase of 0.1% in April, data released by the Eurostat showed Friday. Meanwhile, economists had expected a drop of just 0.1%.
Compared to the previous year, sales fell 3.3% in May following a revised 2.5% decline in April and exceeding the expected fall of 2.7%.
Retail sales data, which came a day after the European Central Bank held its key interest rate at a record low of 1% for the second straight month, indicate that demand remain sluggish in the 16-nation economy despite various stimulus measures. In addition, the latest report also showed that the slight increase seen in April was just a slip from the downtrend.
Sales of food, drinks and tobacco rose 0.2% month-on-month and that in the non-food sector decreased 0.6%. Excluding automotive fuel, total retail trade decreased 0.4%.
Retail trade fell 0.5% month-on-month in EU27 and 3.1 annually. On a monthly basis, among the member states for which data were available, total retail trade rose in four and fell in twelve. The only increases were observed in Latvia, Belgium, Germany and Romania, while Lithuania, Austria, Slovakia, Bulgaria, Denmark and Sweden marked the largest decreases.
A day earlier, the statistical agency said the unemployment rate rose to a ten-year high of 9.5% in May from April's 9.3% as some 273,000 people lost their job in May. That brought the total number of unemployed to 15.01 million.
However, consumer mood rose in the last three months on hope that the worst of the recession would be over soon. But, rising number of unemployed suggests that consumer spending would remain sluggish for some more months.
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