Eurozone retail sales fall for fifth month in six

RETAIL sales in the dozen nations sharing the euro fell for a fifth month in six in January, the Bloomberg purchasing managers index showed yesterday, dimming the outlook for a recovery in consumer spending.

The gauge, based on a survey of more than 1,000 retail executives compiled for Bloomberg LP by NTC Research Ltd, fell to a seasonally adjusted 49.9 from 50.6 in December. A reading below 50 indicates a contraction. Sales also fell from a year earlier.

Unemployment near a five-year high has kept Europe’s export-led recovery from spreading to consumer spending, the largest part of the economy. As a result, the pace of growth in the region is less than half that in the US. “Consumer spending has stalled,” said Carlo Mochi, chief economist for Italy’s biggest retail lobby, Confcommercio, which represents 780,000 businesses, including department store chains Gruppo Coin SpA and La Rinascente SpA. “It’s difficult to say when people will start spending again.”

Falling oil prices, tax cuts and accelerating investment suggest the recovery may broaden to other parts of the economy.

The January retail index figure is still above the 2004 average of 48.9. Metzingen, Germany-based Hugo Boss AG, Germany’s largest clothing maker, last month said earnings gained 7% last year, the first annual sales increase since 2001.