FRANKFURT—German retail sales fell much more than expected in August, although analysts said the mood among German consumers remains broadly positive.
Retail sales dropped by 2.9% from a month earlier, after having risen by 0.3% in July and 4.0% in June. Analysts had forecast a decline of 0.1%.
The drop has to be seen "against the backdrop of the very strong increase in June of 4%", said Commerzbank analyst Ralph Solveen.
In the second quarter, confidence was hit by slowing economic activity and worries over future incomes, said Newedge economist Annalisa Piazza.
"We expect household consumption to regain some strength during the summer. The picture is certainly not very rosy but at least spending is not expected to collapse any time soon," she added.
Earlier this week Germany's GfK consumer research firm said that its forward-looking consumer-climate index would remain unchanged in October compared with September. Consumers expect general economic performance to weaken, the group said, but are also more optimistic about income-growth expectations, due to the strength of the domestic labor market.
The retail sales average for July and August is 0.8% above the second-quarter average, Berenberg's Christian Schulz said, indicating that consumer consumption will add to growth in the third quarter. Still, he cautioned that the uncertainty surrounding the debt crisis "weighs on consumer sentiment," and households might hold off buying durable goods.
Data from the country's labor agency Thursday showed the labor market remains strong, as unemployment dropped by far more than expected. Total unemployment reached a 20-year low in September.
On an annual basis, retail sales rose 2.2% in August, and 3.6% in nominal terms.
The statistics agency only breaks down annual data by category. Sales of groceries, drinks and tobacco products rose 2.2% from a year earlier, and sales of non-groceries 2.5%. The agency also pointed out that firms that are heavily reliant on distribution via internet or mail orders saw real sales up 8.4% year-to-year.
Retail sales data are often revised, sometimes significantly.
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