Latest news with #AlexanderKrueger
Yahoo
01-07-2025
- Business
- Yahoo
German retail sales slip 1.6% in May as consumer spending falters
Germany's retail sales unexpectedly fell by 1.6% in May from April, according to the federal statistics office, surprising analysts who had forecast a 0.5% rise. This marks a sharper drop than the 0.6% decline seen the previous month and raises fresh concerns about the strength of consumer spending heading into the second quarter. Retail figures showed a sharper contraction than anticipated, following a 0.6% drop in April. Economists warn that a recovery in spending is unlikely in the short term, making sustained economic momentum doubtful after strong first‑quarter growth spurred by earlier consumption. Alexander Krueger of Hauck Aufhaeuser Lampe remarked that "[a] large and sustained jump in consumption is not expected for the time being". Consumer mood has cooled, with GfK and NIM surveys recording sentiment at minus 20.3 points for July. The survey of roughly 2,000 households highlighted an increase in saving tendencies amid lingering uncertainty. This cautious stance contradicts government and business hopes that consumption would shore up economic activity as export growth wanes. The dip in retail sales comes ahead of June inflation data, expected later today to show a slight rise to 2.2% from May's 2.1%. Preliminary figures from three key German states—Bavaria, North Rhine-Westphalia and Lower Saxony—suggest inflation eased to around 1.8–2.2%, though Baden-Württemberg saw a minor uptick. Economists view this as a sign of stabilising price pressures that may allow the European Central Bank to hold steady on interest rates. Analysts including Thomas Gitzel of VP Bank say first‑quarter growth is unlikely to be repeated in Q2. With retail sales dropping and consumers hoarding cash, the prospect of a robust second-quarter performance seems remote. While some manufacturing and services activity has returned to growth, domestic demand remains weak. Ultimately, consumer spending drives headline growth in Germany's economy. The unexpected retail sales drop in May, coupled with cautious sentiment and steady inflation, signals that domestic demand may struggle to pick up pace in the near term. That could constrain GDP gains in the months ahead. "German retail sales slip 1.6% in May as consumer spending falters" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
RTÉ News
30-06-2025
- Business
- RTÉ News
German inflation eases to 2% in June, defying forecasts
German inflation eased in June, preliminary data from the federal statistics office showed today, despite forecasts suggesting a slight increase in price pressures in Europe's largest economy. German inflation fell to 2% year on year. Analysts polledby Reuters had forecast EU-harmonised inflation increasing from the previous month to 2.2%. Germany's core inflation rate, which excludes volatile food and energy prices, eased to 2.7% in June from 2.8% the previous month. The German data comes ahead of the euro zone inflation release tomorrow. Inflation in the bloc is expected at 2% in June, the European Central Bank's goal, up from 1.9% the previous month, according to economists polled by Reuters. Data published on Friday showed that EU-harmonised inflation rose in France and Spain. Inflation was unchanged in Italy, data showed today. Overall, the figures add to the evidence that inflation in the euro zone has sustainably returned to the target, said Franziska Palmas, senior Europe economist at Capital Economics. "Barring a renewed surge in energy prices we expect the headline rate to average 2% this year and the ECB to make one final rate cut in September," Palmas said. The ECB cut interest rates at the beginning of June but hinted at a pause in its year-long easing cycle. "The German figure signals to the ECB that it has done its job," said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe, who forecast the inflation rate in Germany would remain at 2% or even dip lower in the coming months,"right where it is supposed to be." Inflation data show that German energy prices fell by 3.5% in June compared to the previous year. While food prices rose 2%, that marked a significant decline from the 2.8% year-on-year increases recorded in May and April. Services inflation, which has been stubbornly high, fell to 3.3% in June from 3.4% in the previous month. "People may still complain about service prices, but due to the relief from energy prices, their still-high increase is hardly noticeable," said Krueger. Despite the positive developments, Commerzbank's chief economist Joerg Kraemer warned that core inflation could remain higher than targeted "for longer than the ECB intends" due to the emerging economic recovery in Germany. German retail sales in surprise 1.6% drop in May Earlier figures showed that German retail sales unexpectedly fell by 1.6% in May compared with the previous month, dampening hopes for strong growth in the second quarter for Europe's largest economy. Analysts polled by Reuters had predicted a 0.5% increase, after sales declined by 0.6% in April. While there could be some recovery in June, a large and sustained jump in consumption is not expected for the time being, said Hauck Aufhaeuser Lampe economist Alexander Krueger. That could spell problems for economic growth in the second quarter after unexpectedly robust growth in the first, thanks in part to consumer spending. "The strong growth seen in the first quarter will not be repeated," said VP Bank economist Thomas Gitzel. "The German economy will have to scale back its ambitions in the second quarter," he added. Consumer sentiment in Germany dipped to -20.3 points heading into July in the most recent survey conducted by the GfK market research institute and the Nuremberg Institute for Market Decisions (NIM). That survey of around 2,000 people found an increased willingness to save - due to continuing uncertainty - was counteracting positive momentum in income prospects.
Gulf Today
04-04-2025
- Automotive
- Gulf Today
German economy remains in the doldrums, set to recover gradually
German industrial orders stagnated in February and January's drop was revised to be less steep, showing that Germany's industrial sector slump could have bottomed out, but the recovery may be slow as the impact of US tariffs takes hold. A Reuters poll of analysts had pointed to a rise of 3.5 per cent, but orders remained unchanged compared with the previous month on a seasonally and calendar adjusted basis, the federal statistics office said on Friday. The less volatile three-month on three-month comparison showed that new orders in the period from December to February were 1.6 per cent lower than in the previous three months. 'The order situation remains bleak,' said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe Privatbank. 'US tariffs are putting even more pressure on industry and job losses are likely to continue.' Meanwhile the German economy will recover from its prolonged period of weakness very slowly, growing by only 0.2 per cent this year, according to the new forecasts of Germany's banks' association, seen by Reuters on Wednesday. The association had previously forecast growth of 0.7 per cent for this year in its forecasts published in September. The economy is not expected to recover noticeably until 2026, with growth of 1.4 per cent, the Association of German Banks said. The German economy has contracted for two consecutive years and its prospects for this year have worsened after US President Donald Trump announced a 25 per cent tariff on imported vehicles, which is expected to hit German automakers particularly hard. The far-reaching tariffs announced by the US will deal a major blow to German industry. The US was Germany's biggest trading partner in 2024, according to the statistics office, with 253 billion euros worth of goods exchanged between them. Germany's manufacturing sector nonetheless showed signs of recovery in March, with its first production increase in nearly two years, the HCOB Germany manufacturing PMI showed. Ralph Solveen, senior economist at Commerzbank, said orders had been moving sideways at a low level for about a year. Although sentiment indicators suggest that a gradual recovery is on the cards for the coming months, this is likely to be very modest due to the massive increase in US tariffs, Solveen said. 'The economy remains in the doldrums,' Jupp Zenzen, economic expert at the German Chamber of Commerce DIHK, said. Breaking down the figures, the statistics office said domestic orders were down 1.2 per cent on the month, while foreign orders rose by 0.8 per cent. The statistics office also revised new orders in January to a 5.5 per cent decline instead of a 7.0 per cent decrease. The difference from the provisional result is due to late reporting of data in the manufacture of metals, machinery and equipment and the automotive industry. In 2026, the positive impact of Germany's fiscal package will be first reflected in growth figures, said Heiner Herkenhoff, CEO of the Association of German Banks. 'However, with strong reforms and the prospect of a competitive tax policy, the new government could stimulate investment earlier,' Herkenhoff said. The group is particularly concerned about corporate investment, which is expected to decline in real terms this year. 'Even the expected increase of 3.5 per cent for 2026 is rather weak compared to previous recoveries,' Herkenhoff said, noting that before the European sovereign debt crisis corporate investment regularly rose by double-digits in economic upswings. Meanwhile the German plant and equipment makers' orders increased unexpectedly in February, boosted by strong domestic demand in a difficult climate, the VDMA association said on Wednesday. Overall orders rose 8 per cent in February compared with the same month last year in real terms, with German contracts jumping 11 per cent. Foreign orders as a whole rose 7 per cent as bookings from the Eurozone increased 4 per cent and contracts from countries outside the currency union were up 9 per cent, said the VDMA. 'Part of the growth is down to the big plant business and part of it comes from the components business for global production,' said VDMA chief economist Ralph Wiechers, adding stocks were depleted so firms were re-ordering. However, investments in new equipment were still far too rare, he said. 'In short, February was - finally - a good month in an unfortunately difficult environment,' he said. In the less volatile three-month period from December to February, orders were up 4 per cent overall, with a 5 per cent decline in domestic orders and an 8 per cent rise in foreign ones.
Reuters
31-03-2025
- Business
- Reuters
German retail sales rise but import prices cloud outlook
March 31 (Reuters) - German retail sales in February exceeded expectations but a rise in import prices indicated a looming inflation surge, potentially dampening consumer spending, according to data published on Monday. Retail sales rose by 0.8% compared with the previous month, data showed on Monday. Analysts polled by Reuters had predicted a 0.2% increase. However, economists do not expect a consumption spree. "The bad mood among consumers is a dent in further spending enthusiasm," said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe Privatbank. "Worries about one's own job are currently increasing as a brake on consumption." The number of unemployed increased by 26,000 in March to 2.92 million, approaching the 3 million mark for the first time in 10 years. February data showed import prices up 3.6% year-on-year, marking the highest increase in more than two years due to higher food prices. Since the German economy purchases many primary products and raw materials from abroad, higher import prices are reflected in inflation data with a time lag. Germany will publish inflation data for March on Monday, with the inflation rate expected to drop to 2.4% from 2.6% the previous month.
