Germany’s retail sales just hit a wall: they dropped 3.2% in September, the worst monthly decline since May 2008. The eurozone’s powerhouse economy didn’t see anything this bad during the financial crisis, or in the years of the euro crisis that followed it.
This all follows the grim news earlier in October that the country’s industrial sector seems to be grinding to a halt. There’s no doubt that this data point is going in the pile suggesting that Germany might be about to fall into recession.
Here’s what Claus Vistesen at Pantheon Macroeconomics had to say about the grim numbers:
The plunge in German retail sales, the biggest drop since May 2007, indicates that the German economy was very close to a technical recession in Q2 and Q3.Retail sales were on track for a decent quarterly expansion before September data, but today’s data are bad enough to indicate that retail sales fell back to a modest contraction in Q3.
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