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Strong German retail sales reinforce hopes of rebound in Q4

German retail sales rose by 2.4% in October, new figures show
German retail sales rose by 2.4% in October, new figures show

German retail sales rose at their fastest pace in more than five years in October, data showed today.

The new figures reinforced expectations that private consumption will remain the main growth driver in Europe's largest economy this year. 

The volatile indicator, which is often subject to revision, showed retail sales rose by 2.4% on the month in real terms, the Federal Statistics Office said. 

This was the highest increase since June 2011 and more than double the forecast in a Reuters poll for a 1% rise. 

A breakdown of the data suggested that the rise was mainly driven by growth in e-commerce as well as clothing and shoes sales. 

On the year, retail sales fell by 1% in real terms, the data showed, undershooting the Reuters consensus forecast of a 1% increase. 

The monthly figure for September was revised down to a fall of 1.5% from a previously reported dip of 1.4%, while the yearly value was revised up to an increase of 0.6% from a previously reported rise of 0.4%. 

The strong data came after a survey by the GfK research institute showed last week that the mood among German consumers improved unexpectedly heading into December. 

Germany's HDE retail association expects overall nominal sales to grow by 2.5% this year. 

Record-high employment, rising real wages and ultra-low borrowing costs have boosted the spending power of Germans, making consumption the main driver of growth in a traditionally export-driven economy.

Meanwhile, German unemployment fell in line with expectations in November, keeping the jobless rate in Europe's biggest economy at a record low, data from the Federal Labour Office showed today. 

"The labour market developed in a broadly favourable way in November," Frank-Juergen Weise, head of the Federal Labour Office, said. 

"Unemployment increased further and demand for new workers continued to develop at a high level. The employment level has, however, stagnated recently," he added. 

Germany's seasonally adjusted jobless total fell by 5,000 to 2.658 million, the Labour Office said. That was in a line with a consensus forecast in a Reuters poll. 

The adjusted unemployment rate remained at 6%, the lowest level since German reunification in 1990.