Eurozone Retail Sales struggle despite purchasing power boost
|Retail Sales have been roughly stable in the first quarter in the eurozone, as March saw a small tick down by -0.1% compared to February. Despite real wage gains, uncertainty seems to be holding consumers back from spending.
Uncertainty continues to cause consumers to shy away from spending on goods, as retail sales in the eurozone have been roughly flat since September 2024. In the year before, a gentle recovery of retail spending had occurred, but consumer confidence has been falling since November last year – coinciding with the US elections. The most recent moves don’t bode well; eurozone consumer confidence fell sharply in response to the trade war escalating in April.
This means that consumers are sitting on the fence at the moment, despite the fact that wage growth is now outpacing inflation. Negotiated wage growth in the eurozone has trended above 4% since early 2023, while inflation has now fallen to benign levels just above 2%. This means that consumers are recovering lost purchasing power but are not yet using that to spend more at the store.
For the months ahead, we expect that the global economic environment will continue to spook consumers, but modest growth in spending could still be in the making, with wage growth also expected to consistently outpace inflation.
Read the original analysis: Eurozone Retail Sales struggle despite purchasing power boost
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.