Retail sales in the eurozone rose for the third straight month in December, and at the fastest annual pace in almost eight years, an indication that falling oil prices are boosting consumer spending and helping to support economic growth.
Separate surveys of purchasing managers also released Wednesday showed the eurozone economy grew more rapidly than first estimated in January, driven by pickups in Germany, Spain and Italy, while France floundered.
The European Union’s statistics agency said retail sales rose by 0.3% from November, following two straight months in which they increased by 0.7%, larger rises than first estimated.
That left sales 2.8% up on December 2013, the largest increase since March 2007, or well before the onset of the global financial crisis that tipped the eurozone economy into its long slump.
Compared with the third quarter, retail sales in the final three months of 2014 were up 0.9%, a sign that consumer spending was responsible for a slight acceleration in economic growth.
“This reinforces our belief that eurozone growth could well surprise on the upside and come in around 1.5% in 2015 as it benefits appreciably from very low oil prices, a much more competitive euro and substantial ECB stimulus,” said Howard Archer, an economist at IHS Economics.
The strong rise in sales over the final three months of last year may ease fears that the eurozone is at risk of a slide into deflation, a self-perpetuating spiral in which consumers postpone purchases because they expect prices to drop, leading to a fall in output and further declines in prices.