German consumption continues to be weak, retail sales fall in Q4 2017

Consumption in Germany continues to be weak. In spite of the tighter labor market and the highest levels of consumer sentiment since the beginning of the millennium, consumer spending in the nation has been comparatively weak recently. In the third quarter, private consumption dropped and the retail sales figures for December released today implied that the fourth quarter might have been slightly better.

Retail sales dropped 1.9 percent sequentially, the most since 2013, reversing the rise in the earlier month to leave them down 1.9 percent year-on-year, the biggest annual drop since 2014. In the fourth quarter as a whole, Germany’s retail sales dropped 0.1 percent quarter-on-quarter, after rising 0.4 percent in the third quarter.

“Certainly, GDP growth in Germany in the final quarter of 2017 - probably 0.5-0.6 percentQ/Q - now looks to have been softer than the rates circa-1 percentQ/Q implied by the main economic surveys, with the weakness of consumption the principal culprit”, noted Daiwa Capital Markets Research in a report.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral -29.6111, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -97.532. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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