Euro zone retail sales weaker than expected in Oct

BRUSSELS (Reuters) – Euro zone retail sales were slightly weaker than expected in October, data showed on Monday, dipping more than forecast in a sign of weakening consumer demand that could herald the onset of the expected technical recession.

The European Union’s statistics office said retail sales in the 19 countries sharing the euro fell 1.8% month-on-month for a 2.7% year-on-year decline. Economists polled by Reuters had expected a fall of 1.7% on the month and 2.6% on the year.

Retail sales are a proxy for consumer demand their fall at the start of the last quarter of the year is in step with European Commission expectations of a economic contraction in the fourth quarter of 2022, followed by another drop in output in the first three months of 2023 — a technical recession.

Sales of non-food products fell the most month-on-month, declining 2.1%, while food, drinks and tobacco sales were the ones that fell the most year-on-year, down 3.9%.

(Reporting by Jan Strupczewski)