Economy News Shares

German Retail Sales and PMI Are Down, Pointing to a Poor Start of the Third Quarter

Sponsored

The German retail sales data reported today was much lower than the estimate. The data has been increasing for the last two months; however, the latest report showed a sharp decline. This is an indication of declining consumer spending and a weaker start to the third quarter. Eurozone PMI was also slightly down at 61.4 vs the expected 61.5. It was also lower than July’s number of 62.8.

German retail sales were down -5.1% and completely missed the forecast of -0.9%. The reading for June was 4.5% and 4.6% in May. 

According to the statistics office,  the easing of Covid-19 restrictions on shopping in the country skewed the comparison for the monthly data.

The year-on-year number was 0.3% down. Sales were up 3.8% in February 2020, before the pandemic’s crisis hit Germany.

Although the German economy was growing in quarter two, it was under pressure due to issues with the supply chain and a slower pace in production yields. 

An increase in Covid-19 cases due to the Delta variant and raw material supply issues was reasons that companies had a less brighter outlook on the months to come. 

According to an analyst at Bankhaus Lampe, retail sales will pick up again since companies are starting to reverse short-time work. The industry implemented this practice during the pandemic. 

Household spending though could be weaker in the third quarter than expectations.

European Central Bank tapering is on the radar

The European Central Bank (ECB) could start tapering their bond purchases sooner. Two central bank policymakers requested the bank start reduction of bond purchases in quarter three already.

Although these two policy setters have been side-lined so far, the ECB vice-president Luis de Guindos mentioned in an interview that Europe’s economy is performing better than expected. 

And they would be discussing the growth forecasts in the next meeting. 

The Eurozone PMI also slid in August, but levels are at the highest it’s been in history. The PMI measures the purchasing manager’s buying activity in the manufacturing sector. MetaNews to update further.

Avatar

Justin N. Richards

Justin N. Richards is a Florida-based technical analyst, market researcher, educator, and trader. Justin began his career in Chicago in 2001 performing futures market analysis for floor traders at the Chicago Board of Trade and the Chicago Mercantile Exchange. He also worked for numerous brokerage firms during that time, all of which hold him in high regard, and he has been providing outstanding analysis services for traders worldwide ever since. Mr. Richards is an expert in the area of market patterns, price and time analysis as it applies to futures, Forex, and stocks. In addition to these talents, he provides educational services for investors looking to improve their analysis and trade skills. Justin has a B.A. in Business Administration from UCLA and an M.S. in Financial Markets and Trading from the Illinois Institute of Technology. Justin’s professional experience, education, and discipline, not only make him an exceptional analyst, they point him out as a reliable, hard working and intelligent business strategist who is dedicated to his craft.
Follow Me:

Related Posts