European retail sales rise in March
EUROPEAN retail sales rose for the first time in three months in March as German consumer spending recovered from a tax increase at the beginning of the year. A gauge of retail sales in the 13-nation euro economy rose to a seasonally adjusted 53.4 after February’s 49.8, a survey of more than 1,000 retail e x e c u t i v e s showed Thursday. A reading above 50 indicates an increase. Faster economic growth has spurred hiring and spending. German unemployment dropped to a six-year low in March, the government said Thursday, and KarstadtQuelle, the country’s largest retailer, reported its first annual profit since 2003. “Thursday’s indicator suggests that the economies of Germany and the euro region will clearly regain strength in the second quarter after a slowdown’’ following the January 1 increase in Germany’s value-added tax, a sales levy, said Joerg Kraemer, chief economist at Commerzbank in Frankfurt. Retail sales “will probably continue to show an expansion.” Germany, Europe’s largest economy, led the increase in retail sales with an index reading of 52.8 after last month’s 45, Thursday’s report showed. German sales plummeted in the first two months of the year after the government raised VAT by three percentage points to 19%. The euro rose to $1.3349 at 1:04 pm in Frankfurt from $1.3322 before the report. European government bonds fell, pushing the yield on the 10-year bund up 3 basis points to 4.06%, as signs of sustained economic growth underpinned the case for higher interest rates. The EC last month raised its 2007 growth forecast for the euro-region economy to 2.4% from 2.1%. The economy expanded 2.6% last year, the most since the start of the decade. In France, the retail sales PMI rose to an eight-month high of 56.8 from 54.7 in February.
Courtesy: EconomicTimes
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