Summary: German retail sales moving sideways

What the chart shows: The chart shows German retail sales in real (inflation-adjusted) terms, with an index where 2010=100

Why is the chart important: The euro area economy has recently surprised on the upside. Absent any new political or fiscal crises, activity should now expand, meaning the EA is out of its long recession. But future developments depend very much on demand in Germany. German retail sales are a very volatile series, which is prone to substantial revisions. Nevertheless, it is disconcerting that – in essence – the volume of German retail sales has moved sideways in a very narrow range over the past two years. Germany is also in recovery., But domestic demand remains sub-par and may not be enough to act as a growth engine for the rest of the euro area.