German Retail Sales Drop For First Time In 4 Months

(RTTNews) - German retail sales fell unexpectedly in April after rising for three consecutive months, reinforcing the assessment that economic growth will slow in the second quarter.

Retail sales turnover fell by a real 0.9 percent from March, when it was up 0.1 percent, data from Destatis showed Friday. Sales were expected to rise by 0.2 percent.

Meanwhile, retail sales grew 3.4 percent on a yearly basis, rebounding from the 1.1 percent drop in March. The rate also exceeded 1.5 percent rise expected by economists.

Sales of food, beverages and tobacco surged 7.9 percent from last year, while clothing and footwear sales slipped 1 percent and household goods sales dipped 2.7 percent.

Turnover in retail trade in the first four months of the year was 1.2 percent larger than in the corresponding period of last year.

In the first quarter, Germany's economic growth rebounded solely driven by domestic demand. The quarterly growth doubled to 0.8 percent from 0.4 percent in the fourth quarter. However, growth is expected to slow in the second quarter.

Nonetheless, private survey from GfK showed that consumer confidence stayed at a 7-year high in June. Economic expectations and willingness to buy strengthened in May from the previous month despite political unrest in Ukraine.

The European Commission projects the biggest euro area economy to grow 1.8 percent this year and 2 percent in 2015.