February 06, 2023 10:00 GMT
Dec Retail Contraction Adds to Q4 Consumer Spending Drag
EUROZONE DEC RETAIL SALES -2.7% M/M (FCST -2.5%); NOV +1.2% M/M
EUROZONE DEC RETAIL SALES -2.8% Y/Y (FCST -2.7%); NOV -2.5% Y/Y
- Euro area retail sales contracted by -2.7% m/m and -2.8% y/y, slightly worse than expectations and signaling weak holiday season spending. Food/drinks/tobacco sales fell by -2.9% m/m and non-food by -2.6%, whilst sales increased by +2.3% m/m for auto fuels.
- This is in line with the stagflationary end to 2022, which saw a marked decline in demand for goods as consumers felt the heat of high energy and food costs.
- The December retail data implies household consumption is set to contribute a substantial drag to Q4 GDP, after having supported a robust Q3 print. The eurozone closely avoided contraction at +0.1% q/q in the Q4 GDP flash print, further detail of the components breakdown will be in the final Q4 GDP data due March 8.
- Looking forward, government energy bill support helped drive improvements in consumer sentiment in January, yet whether the initial uptick in purchasing intentions will feed into higher consumer spending for the bloc remains uncertain.
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