Euro zone retail sales fall more than expected in April

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Euro zone retail sales fell more than expected in April, dragged down by a decline in sales of non-food products, but were still much higher than 12 months earlier when most countries were under strict pandemic lockdowns, data showed on Friday.

The European Union’s statistics office Eurostat said retail sales in the 19 countries sharing the euro fell 3.1% month-on-month in April but were 23.9% higher than a year earlier.

Economists polled by Reuters had expected only a 1.2% monthly fall and forecast a 25.5% year-on-year surge.

Eurostat said sales of non-food products, excluding fuel for cars, plunged 5.1% on the month though were a 42.6% higher than in April 2020. Sales of automotive fuel were 0.4% higher on the month and a massive 65.5% higher year-on-year.

Retail sales are seen as a proxy indicator for consumer demand. That is in turn key for trends in inflation, which the European Central Bank wants to keep below but close to 2% over the medium term. It already reached 2% in May and is likely to move higher, even if only temporarily, this year.