Retail sales increased by 5.7%y/y in nominal and by 3.6%y/y in real terms in July. The market consensus forecast a increase of only 1.4% in nominal terms. Sales of food, beverage and tobacco pushed the aggregate headline figure up in July, but most other categories also posted positive growth, except sales of cars and fuel. Meantime, the unemployment rate rose to 10.8% in July from 10.7% in June, in line with market expectations.
It remains to be seen whether the increase in food and beverages sales can be sustained in the coming months. That said, the breakdown by main groups implies relatively healthy retail demand with the exception of sales of cars and fuels. The latter two groups could pick up going into 2010, provided recent wage trends can be sustained. The chart below shows the close correlation between real wage and retail sales growth. As we have no reason to assume that this correlation will break down in the foreseeable future, wage trends will continue to set the pace in retail sales.