Euro zone retail sales much stronger than expected in August
Economists polled by Reuters had expected a 0.1 percent monthly and a 0.5 percent annual rise after sales contracted 0.4 percent month-on-month in July and rose 0.5 percent on the year.
"Retail sales volumes were up by 0.6 percent in the three months to August compared to the three months to May. Barring a very sharp correction in September, retail sales volumes look likely to have grown by around 0.7 percent quarter-on-quarter in the third quarter," Archer said.
Although volatile, retail sales data is a proxy for household demand, a central element of the Euro zone's economic recovery that stalled in the second quarter.
Eurostat data showed sales of non-food products and fuel at petrol stations contributed most to the monthly rise of the index in August, with the Euro zone's biggest economy Germany reporting the biggest gain of 2.5 percent.
Economists said that among other reasons for the improvement could be the very low Euro zone inflation shoring up purchasing power, and the fact that over the 14 months to August, unemployment in the Euro zone declined by 768,000 people.
Economists also point to the strong month-on-month growth in spending in Germany, where unemployment is very low and real wages are good, compared to other countries.
Other economists, however, preferred to point out risks, saying this rebound might not last.
In annual terms, sales of non-food products played an even bigger role as their 3.6 percent year-on-year rise offset a 0.2 percent fall in the sales of food and the same drop in the sales of petrol.
Both Germany and France, the second biggest Euro zone economy, recorded hefty gains of 3.1 and 2.1 percent respectively.
Source: reuters.com