Euro zone Jan retail sales fall less than expected

Euro zone Jan retail sales fall less than expected

Brussels: Euro zone retail sales fell only slightly less than expected in January after briefly rising month-on-month in December, underlining the continued fragility of household demand as unemployment grows.

Retail sales in the 16-country currency area fell 0.3% in January against December and dropped 1.3% year-on-year, the European Union’s statistics office, Eurostat, said on Wednesday.

Economists polled by Reuters had on average expected a 0.4% month-on-month fall and a 1.6% annual decline in the indicator, seen as a proxy for assessing the strength of consumer demand and therefore inflationary pressure.

But household confidence is weak as unemployment has risen to 9.9% as of January, a level not seen since October 1998.

The data comes a day before the European Central Bank meets on interest rates amid wide expectations it will leave its main refinancing rate on hold at a record low of 1.0%.

The ECB wants annual inflation to be just below 2% over the medium term. Consumer prices grew by 0.9% year-on-year in February, slowing from a 1.0% rise in January, Eurostat said on Tuesday.

In the euro zone’s two biggest economies — Germany and France — retail sales were unchanged month-on-month in January.