Sharp Rise in German Retail Sales

After a slew of disappointing economic data, news that German retail sales rose by 2.1 percent in real or price-adjusted terms in January after declining by 0.3 percent in December spurred hope for the eurozone's biggest economy. The increase exceeded analysts' expectations of a modest increase of 0.8 percent and comes as a welcome breath of fresh air for the German economy which is struggling with record high unemployment and below-par growth. On a 12-month basis, however, retail sales were down by 0.4 percent in January from the year-earlier figure, the federal statistics office said in a statement. Commerzbank economist Ralph Solveen said the retail sales data "came as a pleasant surprise." The data would fuel hopes for a tentative pick-up in consumer demand, the Achilless' heel of the German economy, in the first quarter of 2005, Solveen said.