DUBLIN - Bloomberg
European retail sales declined 2.9 percent in April, more than three times as much as economists forecast, as soaring fuel and food prices undermined consumer spending.
The drop in euro-area retail sales from a year earlier is the largest since the data series began more than a decade ago, the European Union's statistics office in Luxembourg said yesterday. Sales declined 0.6 percent from the prior month. Economists had expected a 0.8 percent annual decline and a monthly gain of 0.2 percent, according to Bloomberg News surveys.
European consumers are scaling back spending plans, threatening to stall growth, as the fastest inflation in 16 years erodes their purchasing power. U.S. consumer confidence also has been sapped by rising prices, falling to a 28-year low last month, according to an index by the University of Michigan.
"The risk of a bleaker economic future and the reality of weaker spending power are taking a significant toll on the confidence of consumers worldwide,'' said Austin Hughes, chief economist at IIB Bank in Dublin.
Even unemployment at a record low has failed to spur spending. Confidence among households in France dropped to a all-time low last month, while sentiment in Germany, Europe's largest economy, fell more than economists forecast.
Crude oil rose to a record $135.09 a barrel on May 22 and consumer-price inflation accelerated to 3.6 percent last month from 3.3 percent in April. Inflation has also been boosted by prices for food, as commodities including corn, soybeans and wheat reached records this year.
The statistics office revised the annual decline retail sales in March to 2.3 percent from an initially reported 1.6 percent.