Eurozone retail sector suffers another sharp drop in sales

Ben Southwood
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RETAIL SALES continued to decline in the Eurozone in November, according to data out yesterday, making the month the 13th of shrinking volumes.

Markit’s retail purchasing managers’ index rose slightly to 45.8, from 45.3 in October, but still indicated steady contraction, since it remained below the crucial no change level of 50.

This came as Italian 10-year bond yields dived to a two-year low of 4.485 per cent before rising back to 4.6 per cent after a bond auction. Spanish 10-year yields also fell, hitting their lowest point since March at 5.21 per cent, although they also rose during the day, eventually reaching 5.38 per cent.

And sentiment data from the European Commission (EC) also came in more cheery. The EC’s measure of consumer confidence rose 1.4 to 85.7, after eight months of continuous falls. The Eurozone’s two biggest economies, France and Spain, enjoyed the biggest improvements, the EC said.

And German labour market data from Destatis added to this more optimistic outlook on the Eurozone’s economic climate. Employment in Germany was up 1.4 per cent – or 285,000 – on the year, official statistical body Destatis said, hitting 41.9m. However, unemployment also increased 36,000 over the year to hit 2.24m.

But analysts were unimpressed with the improvements. “The economic outlook for the Eurozone remains pretty awful,” said Jonathan Loynes at Capital Economics. And Citigroup analysts predicted the Eurozone would remain in recession going into 2013.