Retail sales across the 18 countries that share the euro rose for the fourth straight month in April, and at the fastest year-to-year pace since early 2007.
The European Union's statistics agency, Eurostat, released the figures as members of the European Central Bank's governing council gathered in Frankfurt, a meeting that most economists expect to conclude with the announcement of a series of measuresdesigned to boost growth and the inflation rate.
Eurostat said the volume of sales rose 0.4% from March, and 2.4% from April 2013.
That was the largest year-to-year increase since March 2007, when sales rose 3.0%. The increase in retail sales may suggest to ECB policy makers that consumer spending is on the rise, and that this will eventually push prices higher and the annual rate of inflation closer to their target of just below 2.0%.
But with unemployment still close to record highs, albeit in decline, and wage growth sluggish, that is likely to take some time.
The Greek statistics agency said Thursday the country's unemployment rate in March eased to 26.8% from an upwardly revised 26.9% in February and 26.9% in January. But, the rate is more than twice the euro zone's average rate of 11.7% in April and remains the highest in Europe.
Figures released by Eurostat Wednesday showed consumer spending rose by just 0.1% in the first quarter, and the prolonged weakness of household expenditure has been a major contributor to the weak performance of the euro-zone economy since the 2008 financial crisis.
ECB policy makers are confronted by the immediate problem of an inflation rate that, at 0.5% in May, is judged by many to be dangerously low, and itself a drag on growth.
Speaking Thursday, Bank of Japan board member Takehiro Sato warned of the risk of Europe slipping into chronic deflation, adding that slower growth in Europe could muddy the prospects for global growth. Japan's experience of deflation shows that stunted price growth over a long period lowers people's inflation expectations.
The ECB is widely expected to reduce interest rates on Thursday, and because its deposit rate is already at zero, this would include the unusual move of installing a negative rate on overnight bank deposits--effectively charging banks to park funds at the ECB.
A negative deposit rate aims to boost lending between banks and ultimately to the private sector. It would also make euro assets less attractive to investors, helping to weaken the exchange rate and boost inflation through import prices.
The ECB is also expected to commit itself to provide banks with unlimited credit well into 2016, signaling that it may be the last of the world's major central banks to raise official rates.
Additional ultracheap loans to banks, conditional on them lending more freely to businesses, are also seen likely. Even moves like that may be too little, too late, some economists say, since it takes months for changes in interest rates to work through the economy.
Central banks in the U.S. and Japan have responded to low inflation by adding newly created money to the economy, a policy known as quantitative easing. The simplest way for the ECB to follow suit would be to purchase government bonds of all 18 euro members.
But quantitative easing is taboo in Germany, where it kindles deep-rooted fears of politically captive central banks propping up profligate governments.
With government bond yields already low--10-year yields in Spain and Italy aren't far above those of the U.S.--it is unclear how much benefit this would even deliver.
nasdaq.com
The European Union's statistics agency, Eurostat, released the figures as members of the European Central Bank's governing council gathered in Frankfurt, a meeting that most economists expect to conclude with the announcement of a series of measuresdesigned to boost growth and the inflation rate.
Eurostat said the volume of sales rose 0.4% from March, and 2.4% from April 2013.
That was the largest year-to-year increase since March 2007, when sales rose 3.0%. The increase in retail sales may suggest to ECB policy makers that consumer spending is on the rise, and that this will eventually push prices higher and the annual rate of inflation closer to their target of just below 2.0%.
But with unemployment still close to record highs, albeit in decline, and wage growth sluggish, that is likely to take some time.
The Greek statistics agency said Thursday the country's unemployment rate in March eased to 26.8% from an upwardly revised 26.9% in February and 26.9% in January. But, the rate is more than twice the euro zone's average rate of 11.7% in April and remains the highest in Europe.
Figures released by Eurostat Wednesday showed consumer spending rose by just 0.1% in the first quarter, and the prolonged weakness of household expenditure has been a major contributor to the weak performance of the euro-zone economy since the 2008 financial crisis.
ECB policy makers are confronted by the immediate problem of an inflation rate that, at 0.5% in May, is judged by many to be dangerously low, and itself a drag on growth.
Speaking Thursday, Bank of Japan board member Takehiro Sato warned of the risk of Europe slipping into chronic deflation, adding that slower growth in Europe could muddy the prospects for global growth. Japan's experience of deflation shows that stunted price growth over a long period lowers people's inflation expectations.
The ECB is widely expected to reduce interest rates on Thursday, and because its deposit rate is already at zero, this would include the unusual move of installing a negative rate on overnight bank deposits--effectively charging banks to park funds at the ECB.
A negative deposit rate aims to boost lending between banks and ultimately to the private sector. It would also make euro assets less attractive to investors, helping to weaken the exchange rate and boost inflation through import prices.
The ECB is also expected to commit itself to provide banks with unlimited credit well into 2016, signaling that it may be the last of the world's major central banks to raise official rates.
Additional ultracheap loans to banks, conditional on them lending more freely to businesses, are also seen likely. Even moves like that may be too little, too late, some economists say, since it takes months for changes in interest rates to work through the economy.
Central banks in the U.S. and Japan have responded to low inflation by adding newly created money to the economy, a policy known as quantitative easing. The simplest way for the ECB to follow suit would be to purchase government bonds of all 18 euro members.
But quantitative easing is taboo in Germany, where it kindles deep-rooted fears of politically captive central banks propping up profligate governments.
With government bond yields already low--10-year yields in Spain and Italy aren't far above those of the U.S.--it is unclear how much benefit this would even deliver.
nasdaq.com
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