German retail sales fall unexpectedly in October

German retail sales dropped unexpectedly in October, posting their deepest monthly fall in more than a year, data showed on Thursday, in a rare sign of weakness in Europe’s biggest economy.

The volatile indicator, which is often subject to revision, showed retail sales fell by 1.2 percent on the month in real terms, the Federal Statistics Office said.

This compared with the Reuters consensus forecast for a 0.3 percent rise and an increase of 0.5 percent in the previous month. It was the biggest drop since September 2016.

On the year, retail sales fell by 1.4 percent, undershooting a Reuters consensus forecast for an increase of 2.8 percent. They had risen by 4.1 percent in September.

Traditionally thrifty Germans have helped private consumption displace exports as the main driver of growth thanks to record-high employment, increased job security, rising real wages and ultra-low borrowing costs.

The retail sales data came after a GfK survey published on Tuesday showed the positive mood among German shoppers was unchanged on a high level heading into December.