Eurozone retail sales hit 4-month high, Germany and France lead rebound

Eurozone retail sales rose for a second straight month in February, in a fresh sign that the currency area’s modest economic recovery likely accelerated in the first quarter. Eurozone retail sales rose 0.7 percent month-on-month in February, data from Eurostat showed Tuesday.

The rise was faster than the revised 0.1 percent rise seen in the prior month, and beat expectations for a 0.5 percent rise. Eurozone retail sales increased at the fastest pace in four months in February, largely reflecting higher clothing and footwear sales. Strong growth in Germany and France and solid output elsewhere likely supported.

A 0.9 percent increase for non-food products and 0.7 percent for food, drinks and tobacco drove the monthly gain, while automotive fuel sales for passenger cars fell by 0.7 percent. Germany, up 1.8 percent, and France, up 0.7 percent were driving forces, while Portugal's 3.1 percent, Croatia's 2.8 percent and Slovenia's 2.3 percent rises led the way.

On a yearly basis, retail sales growth rose to 1.8 percent in February from a revised 1.5 percent in the previous month. The year-on-year rise defied expectations for a slowdown to 1 percent. January's month-on-month retail sales figure was revised from -0.1 percent and the annual growth from 1.2 percent.

"February's decent rise in Eurozone retail sales provides reassurance that the recent markedly higher inflation has not sent consumers into their shells," IHS Markit economist Howard Archer said.