Euro retail sales increased for the third month in a row in December . The increase of 0.3% m/m in December was in line with our estimate but above consensus of 0.0% m/m. The figure was revised slightly higher to 0.7% m/m in November from 0.6% in the first estimate.
Retail sales are usually quite volatile - hence, there was some downside risk to our estimate but the third consecutive month of higher sales confirms our view of stronger growth in private consumption following decent growth of 0.5% q/q in Q3 . Growth in private consumption in Q3 was the highest since 2010 and 2007, when the economy expanded by 1.9% and 3.0%, respectively.
Private consumption is boosted by the fall in oil prices, while lower unemployment and higher consumer confidence are supportive as well. There are still no signs that consumers are postponing spending due to deflation. Instead, the fall in the oil price has increased their purchasing power. Based partly on these factors, we expect euro GDP growth of 1.5% in 2015, which is above consensus of 1.1% .
Details are still limited but retail sales of non-food products rose 0.3% m/m in December, after increasing 1.5% in November and 1.1% in October. Food, drink and tobacco increased 0.3% m/m and automotive fuel was up 0.4% m/m in December.
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