The first official euro-zone data release for July – retail sales – suggested that the consumer sector made a strong start to Q3. Indeed, the 1.1% rise in sales pushed the annual growth rate up to 2.7%, its strongest in five months. However, this is unlikely to be sustained. Retail sales are very volatile on a monthly basis, and the EC’s consumer confidence index for August points to annual sales growth of about 1.5%. What’s more, the boost to growth in consumers’ real incomes from previous falls in energy prices is fading. Accordingly, we think that the consumer recovery will lose steam over the rest of the year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services