Slight German retail sales

German retail sales including vehicles and turnover at gas stations rose by 0.6 percent on the month in July in real terms, preliminary Bundesbank figures showed.

 However, this followed a drop of 3.5
percent in June, and the German central bank's data showed the sales
volume over the two month period was the weakest in ten years in
Germany.

Earlier on Monday, a narrower retail
index published by the Federal Statistics Office excluding car sales
and gas station turnover showed an unexpected monthly decline of 1.5
percent.

Despite a steady 2-1/2 year decline in
jobless numbers and record employment, consumer spending in the
German economy has remained sluggish, weighed down by high energy and
food prices.

Figures released last week showed
German gross domestic product (GDP) contracted by 0.5 percent in the
second quarter. The decline was led by a drop in private consumption,
which shaved 0.4 percentage points from GDP in the quarter.

Germany's adjusted jobless rate dropped
to a 16-year-low in August, but many economists believe unemployment
is likely to begin rising again in coming months due to the slowdown.

Though Germany enjoyed a strong start
to the year — the economy grew by 1.3 percent in the first quarter
— recent indicators have painted a much less positive picture.