Could Germany be signifying an economic 'up'?
German retail sales rose by 2.3% in October, recording the biggest month-on-month gain in three years.
As Europe's largest economy, does this signify an optimistic turn for 2011 in Europe?
The Federal Statistics Office, Destatis, said that sales rose 2.3% in inflation and seasonally adjusted terms in October. The rise was the strongest monthly gain since January 2008 and surpassed all forecasts in a Reuters poll of economists. The strongest projection was for a 2.0per cent gain.
The figures add to other recent data pointing to a robust upswing in Germany. Business morale improved in November to its strongest level since 1991, and unemployment fell in November for a 16th straight month.
"The conditions for a lasting upturn in domestic demand haven't been this good in a long time," said UniCredit economist Alexander Koch.
"There's a lot suggesting that the fourth quarter will be good and Christmas-season business will be quite good as well."
Germany's strong recovery has helped pull the euro zone to improved growth in recent quarters, but there are also concerns it may be leaving other struggling economies behind. Spending by German consumers helps to pass growth on to its European neighbours for whom it is a major export market.
On Sunday, Germany's HDE retail industry association reported a strong first weekend of pre-Christmas shopping. The group expects overall Christmas sales to rise 2.5 per cent from 2009, and spending to grow by 1 per cent at least in 2011.
Underlining the importance of the two-month holiday season for the German market, HDE says that retailers garner around one-fifth of their annual sales from November and December.
This year, it expects growth in online business to outpace the rest of the sector considerably, with sales growing by around 8 per cent to almost 6 billion.
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