Throughout the crisis, Germany has been reluctant to endorse any policy measures that could be considered stimulative.
Then in recent days, the sounds out of Germany have changed, as multiple reports suggested that the government is softening its stance and even considering — gasp — fiscal stimulus.
This is good news for Europe, though earlier this week we noted cynically that the famous German employment engine seemed to be sputtering.
And now there’s more evidence of a sputter in the form of retail sales.
From Reuters on April retail sales:
The notoriously volatile indicator fell by a real 0.4 per cent on the month after dropping by an upwardly revised 0.1 per cent in March, data from the Federal Statistics Office showed. That compared with the consensus forecast in a Reuters poll for a 0.2 per cent monthly gain.
The data is adding up. Germany is weakening, and there’s an election coming up in September.
We’re not surprised that the tone out of the government is changing.