Buoyant German retail gross sales, jobs knowledge belie broader COVID gloom

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© Reuters. Discount sign is displayed in a clothing store window in Frankfurt

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BERLIN (Reuters) – German retail sales rose in November and jobless numbers fell last month, against forecasts that both readings would worsen, suggesting parts of Europe’s largest economy have weathered the impact of the coronavirus unexpectedly well.

Retail sales rose 1.9% in November, when markets had anticipated a contraction, the Federal Statistics Office said on Tuesday, adding that it expected sales to have grown around 4% during 2020 as a whole – exceeding 2019’s 3.2% expansion.

The monthly increase – covering a period when Germany was in partial lockdown with shops still open – was driven by online transactions and spending on home improvements, the office said on Tuesday.

In separate data, the Federal Labour Agency said the number of jobless fell a seasonally-adjusted 37,000 year on year in December, when the lockdown was tightened, with most shops forced to close from mid-month. Analysts had expected an increase.

ING analyst Carsten Brzeski said use of a state-backed part-time work scheme designed to protect jobs meant that the figures should be taken “not only with a pinch but a big spoon of salt.” Some 666,000 people were placed on the scheme in December.

National and regional leaders are expected to further extend the tougher restrictions on Tuesday as COVID infection rates have remained high, which some economists think could tip the economy into recession.

The Statistics Office said its provisional full-year retail sales growth figure – contrasting with an expected drop of 5.5% in gross domestic product, according to Bundesbank data – included December’s full lockdown.

It also said the estimate was “freighted with greater uncertainties” than usual due to the pandemic.

November’s biggest winners were in online and delivery retail, where revenues rose 31.8% compared to November 2019, while spending on household decorations, appliances and building materials rose 15.4%.

Clothing sales fell 20% and mixed retail – a category including department stores – was down 6.1%.

 

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