September 30, 2016 / 6:16 AM / a year ago

German retail sales soar on the year, fall on the month in August

BERLIN, Sept 30 (Reuters) - German retail sales rose more than expected in August, data showed on Friday, in another positive sign for consumer spending that is expected to drive growth in Europe’s biggest economy and compensate for weakening foreign trade.

The volatile indicator, which is often subject to revision, showed retail sales jumped by 3.7 percent on the year in real terms, the Federal Statistics Office said. This was higher than a forecast in a Reuters poll for a 1.3 percent rise.

On the month, retail sales edged down 0.4 percent in real terms, the data showed. The monthly figure for July was revised down to a rise of 0.5 percent from a previously reported increase of 1.7 percent.

In the first eight months of the year, retail sales rose by 2.2 percent in real terms and by 2.3 percent in nominal terms compared with the same period of the previous year.

Germany’s HDE retail association last week raised its forecast for nominal sales growth in 2016 to 2.5 percent, up from its previous forecast of 2.0 percent.

The German government expects soaring private consumption, helped by record-high employment, rising real wages and nearly stable prices, to help the economy grow by 1.7 percent this year. Economic institutes predict an expansion of 1.9 percent. (Reporting by Michael Nienaber)

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