The volume of euro zone retail sales increased much more than forecast in June, in a new sign of the robust domestic consumption that is sustaining output expansion in the 19-country currency bloc, estimates released today show.

Retail sales in the euro zone increased by 0.5% in June on the month, the European Union's statistics office Eurostat said, well above market expectations of a 0.1% rise.

As inflation slowed in June to 1.3%, showing little signs of a future rebound, euro zone consumers spent more than in May when retail sales went up by 0.4%.

Inflation remained unchanged at 1.3% in July, preliminary estimates showed this week, raising expectations that retail sales may continue to grow healthily in July, helping the bloc start the third quarter with robust growth.

The euro zone's economy expanded by 0.5% in the January-March period and by 0.6% in the second quarter.

Year-on-year, the volume of retail sales surged 3.1% in June, higher than the 2.6% rise forecast by economists polled by Reuters.

It was the highest expansion recorded this year, well above the downwardly revised 2.4% increase in May.

Month-on-month retail sales rose 1% in June for car fuel after a 0.6% growth in May.

Shoppers also bought more food, tobacco and drink products for which sales increased by 0.7% on the month, after they dropped 0.2% in May.

Shoppers were more inclined to spend both on durable and non-durable goods, in a sign that consumption is more widely spread across the population, as unemployment falls.

In June unemployment reached its lowest rate in the euro zone since 2009.

Sales of non-durable goods such as clothes and footwear went up in June by 1.4 % on the month, while consumers spent also 1.3% more on furniture and electrical goods.

Pharmaceuticals and medical goods were the only component of the indicator that showed a fall in June, dropping by 0.2% on the month after a 1.1% surge in May.

Among the largest economies of the euro zone, sales went up by 1.1% in Germany, the bloc's biggest economy, more than twice than the 0.5% rise recorded in May.

Spain's retail sales grew 0.7% while in the Netherlands they increased by 0.9% on the month.

France was the only major economy of the bloc to record a fall in sales.

Shoppers there spent 0.3% less in June than in the previous month, partly offsetting the 0.5% rise recorded in May. Data for Italy were not available.

Outside the euro zone, Britain recorded in June a 0.3% drop in monthly retail sales, the second consecutive decline after the 0.3% fall in May.