By Joshua Kirby
Retail trade decreased more than expected in the eurozone in August, suggesting demand is continuing to cool amid a tight monetary policy in the bloc.
The volume of retail trade was 1.2% lower in August than in July, when sales also slipped slightly, according to new and revised figures released Wednesday by European Union statistics body Eurostat.
August sales had been expected to fall 0.6% on month, according to economists polled by The Wall Street Journal.
On an annual basis, sales were 2.1% lower in August, the figures showed.
Fuel sales weighed on total trade, falling 3% from the previous month. Mail orders and internet commerce fell more sharply, by 4.5%, while sales of food, drinks and tobacco decreased by 1.2%.
Inflation had stayed sticky in August in the 20-member currency union, but has cooled since, easing to 4.3% in September, Eurostat figures showed at the end of last week. This signals that higher interest rates have begun to take some heat out of the economy after more than a year of exceptionally high price rises.
The weaker-than-expected retail demand might meanwhile help convince the European Central Bank to keep interest rates untouched following last month’s hike, especially if inflation continues to ease and demand for goods and labor continues to cool.
Write to Joshua Kirby at [email protected]; @joshualeokirby
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