BUSINESS

High unemployment, fears over deepening of crisis hit eurozone retail sales in November

01/06/2012 08:29 EST | Updated 03/07/2012 05:12 EST
BRUSSELS - Retails sales in the 17-nation eurozone dropped in November, official statistics showed Friday, as consumers felt the bite of austerity measures and feared the currency union could slip deeper into crisis.

Retail sales in the eurozone fell 0.8 per cent compared with October and were down 2.5 per cent from November 2010, according to Eurostat, the EU's statistics agency.

The steepest declines were seen in Portugal, which had to be bailed out in April and where sales fell 2.6 per cent during the month and were down a massive 9.2 per cent from a year earlier.

But even in richer states like Germany and the Netherlands, consumers were more reluctant to part with their money, with retail sales slipping 0.9 per cent in both countries during November. That shows how the eurozone's worsening debt crisis is taking its toll even on countries with strong economies.

For the whole European Union, which includes non-euro members like the U.K. and Sweden, November retail sales dropped 0.6 per cent from October and 1.3 per cent compared with a year earlier.

Consumers appear worried by high unemployment, which remained stuck at 10.3 per cent in November — unchanged from October but above the 10 per cent seen a year earlier — and a darkening outlook on the economy.

The weak data also underlines how many people found themselves in a worse position at the end of 2011 than at the end of 2010 — when there were hopes that the continent was turning a corner after two difficult years brought on by the collapse of U.S. investment bank Lehman Brothers in 2008.

Spain's unemployment rate was highest at 22.9 per cent, up from 20.4 per cent a year earlier. That's more than four times as high as in Austria, where only 4 per cent of people were looking for work. For the whole EU, the unemployment rate remained at 9.8 per cent.

The dark mood is set to continue in the eurozone, with a Eurostat economic sentiment indicator falling 0.5 of a point to 93.3 in December, far below the long-term average of 100.

Italy and Spain, the eurozone's third and forth largest economies which have been pulled into the eye of the crisis in recent months, grew especially pessimistic about the economy. Economic sentiment fell 4.6 points in Italy and 1.3 points in Spain.

In the 27 EU countries, economic sentiment was down 0.8 point at 92.