Euro zone Jan retail sales dip

Euro zone retail sales fell more than expected year-on-year in January and were revised down sharply for December in another sign of continued economic recession.

 The European Union statistics office, Eurostat said the retail sales in the
16-nation euro area inched up 0.1 percent month-on-month but fell 2.2
percent annually, Eurostat said.

Economists polled by Reuters had expected a 0.2 percent
monthly increase and a 2.1 percent decline year-on-year.

Eurostat revised down its retail
trade
figures for December — when they are traditionally boosted by Christmas — to
minus 0.3 percent month-on-month and minus 2.4 percent year-on-year from
previous readings of 0.0 and -1.6 percent respectively.

The figures are another sign the euro zone
is sinking deeper into its first ever recession, hit by a global credit crunch
that has slashed financing to companies and households, choking demand
and prompting corporate belt-tightening.

Retail sales are an indication of household demand.
Falling private consumption was one of the reasons for a shrinkage in the euro zone
economy
in the third and fourth quarters of 2008.

In response to the weak economic performance and falling inflation,
the European Central Bank has cut interest rates by a total
of 275 basis points to 1.5 percent over the last few months.

Eurostat said food,
drink
and tobacco sales fell 0.3 percent month-on-month in January, while sales of
non-food
products increased 0.4 percent.