Bert Colijn
ING Economic and Financial Analysis
The 0.1% increase in May doesn’t sound like much, but after years of recession, evidence is mounting that the bottom in retail trade is behind us. With real wages improving, the second half of 2024 should see a continuation of the cautious upward trend.
After a boom in 2021 on the back of store reopenings, a long correction for retail ensued. The peak in sales happened in November 2021, after which sales entered a recession that lasted well into last year. Signs of bottoming out started late last year, but around the turn of the year eurozone retail sales experienced another three consecutive declines, casting doubt on whether the downward trend had been broken. Since March this year, retail sales have held at a slightly higher level, which means that we can now say with more comfort that a slow turnaround is underway.
While retail volumes are still 3.5% below their post-pandemic peak, these tentative signs of recovery mean that consumer spending is likely to show upside for the rest of the year. Then again, this is not a swift rebound by any means. Improvements in volumes are still ever so slight and inventories remain high in the sector. But still, a turnaround has to start somewhere and with real wage growth improving, expectations of stronger sales over the course of this year are not unrealistic. For GDP growth, this means that expectations of somewhat better economic growth on the back of household consumption recovery are still in the cards.
Read the original analysis: Eurozone Retail Sales continue to creep up slowly
Content disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more here: https://think.ing.com/content-disclaimer/
Recommended Content
Editors’ Picks
EUR/USD retreats from daily highs, holds above 1.0800
EUR/USD loses traction but holds above 1.0800 after touching its highest level in three weeks above 1.0840. Nonfarm Payrolls in the US rose more than expected in June but downward revisions to May and April don't allow the USD to gather strength.
GBP/USD struggles to hold above 1.2800 after US jobs data
GBP/USD spiked above 1.2800 with the immediate reaction to the mixed US jobs report but retreated below this level. Nonfarm Payrolls in the US rose 206,000 in June. The Unemployment Rate ticked up to 4.1% and annual wage inflation declined to 3.9%.
Gold approaches $2,380 on robust NFP data
Gold intensifies the bullish stance for the day, rising to the vicinity of the $2,380 region following the publication of the US labour market report for the month of June. The benchmark 10-year US Treasury bond yield stays deep in the red near 4.3%, helping XAU/USD push higher.
Crypto Today: Bitcoin, Ethereum and Ripple lose key support levels, extend declines on Friday
Crypto market lost nearly 6% in market capitalization, down to $2.121 trillion. Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) erased recent gains from 2024.
How the new UK government can tackle the public finances
Britain is waking up to a Labour government for the first time in 14 years, and one that will command a significant majority in the House of Commons. But the honeymoon for incoming Prime Minister Keir Starmer will be short-lived.