The German retail sales grew in June, exceeding the figures over 12 years. Also, data on unemployment grew less than expected for the month of July based on the data from Wednesday. This gives a small chance for household spending to support Europe’s biggest economy.
For years, the job market remained strong despite the economic slowdown due to a drop in the manufacturing sector. German’s labor was known to drive consumption cycle for a decade.
The retail sales grew by 3.5% in June after a revision of 1.7% decline in May, according to data from the Federal Statistics. Since December 2006, this was the highest increase and also surpassed the assumption of Reuters with 0.5%.
In the first six months of 2019, retail sales increased by 2.2% supported by online sales.
Yet, the consumer sentiment did not get any better for three months straight based on the survey collected on Tuesday. In the background, the global economic slowdown, trade war, and uncertainty in Brexit has raised concerns to the people about their jobs and income with risks of unemployment.
Contradictorily, the Federal Labor Office stated that these fears are not certain, that is, at the present time. The number of people unemployed has only increased by a thousand to 2.283 million, seasonally adjusted, compared to the Reuters forecast of 2 thousand. The percentage of jobless people are steadfast in 5.0%, just a bit higher than the recorded 43.9% earlier this year.
Moreover, a senior official at the Labour Office, Daniel Terzenbach mentioned that these unemployment and underemployment situation was due to the “beginning of the summer break”. Even so, he added that the employment is rising and there is just a little backstep in demand for employees.
Overall, the economic output of Germany is likely to stale or reduce in the months ahead.