Euro Zone retail sales were lower than expected in October, data released on Monday by the European Union’s statistics office revealed. This indicates a drop in consumer demand ahead of an expected technical recession.
The European Union reported that retail sales in the 19 countries sharing the euro fell by 1.8% on a month-on-month basis. This contributed to a 2.7% year-on-year decline.
October’s retail sales results fell below analysts’ expectations. Economists polled by Reuters expected a 1.7% month-on-month decline along with a 2.6% decline on a year-on-year basis. While a decrease nonetheless, these projections are both 0.1% lower than the reported retail sales growth figures.
Sales of non-food products experienced the sharpest decline in October, with a 2.1% month-on-month drop, while food, drinks, and tobacco sales incurred the biggest hit on a year-on-year basis, falling by 3.9%.
Retail sales are viewed by economists as an indicator of consumer demand. The recent sales slump suggests that consumer demand will slump in the fourth quarter of 2022, thereby leading to an economic contraction over the quarter. The Economic Commission also expects another sales slump in the first quarter of 2023.