Retail sales in the 17 countries that share the euro surged at the fastest rate in over a year to open the second quarter, although the data could represent more of a rebound from a previous slump than a sustainable level of growth, according to The Wall Street Journal. On Tuesday, the European Union reported that the volume of retail sales in the eurozone increased by 0.9% in April from the previous month, which is the strongest monthly increase since March of 2010. The gain brought retail sales to a 1.1% increase year-over-year, and far outpaced economists forecasts for a 0.3% monthly gain and no change annually after a 0.9% monthly drop and 1.7% annual decline recorded during March.
The strong retail data supports the findings of a recent survey by the European Commission that showed consumers in the region becoming more upbeat, although economists are still concerned about elevated inflation, weak wage growth, austerity measures, and high unemployment. Emilie Gay of Capital Economics said the headwinds facing consumers will likely limit second quarter economic growth to a level that is “far weaker” than the 0.8% gain posted in the first three months of the year. The data also showed a divergence of growth in the region, as France and Germany continued to lead growth while debt-burdened countries on the periphery saw declining sales volumes.