The final figure of euro zone services PMI (Purchasing Managers' Index) confirmed the first estimate, which showed a slight decline in the headline index from 51.6 to 51.5. National data show a mixed picture as earlier reported French (56.8 from 56.1) and German (51.1 from 50.4) services PMI were significantly upwardly revised, while Spanish (45.2 from 46.5), Irish (51.1 from 51.7) services PMI disappointed somewhat. Italian services PMI eased from 48.6 to 48.4, exactly in line with expectations. The composite PMI was downwardly revised from 50.9 to 50.7, near-stabilization levels. With the manufacturing ISM already below 50 and the services PMI edging lower too, the euro zone economy is close to stabilization levels after already a sharp slowdown in the second quarter.
In July, euro zone retail sales rose by 0.2% M/M, increasing for a second straight month, while the consensus was looking for a stabilization. The previous figure was slightly downwardly revised from 0.9% M/M to 0.7% M/M. The breakdown shows that strength was based in the non-food sector (0.5% M/M), while sales of food, drink and tobacco dropped by 0.4% M/M in July. Retail sales were strong in Portugal (2.5% M/M), Belgium (1.2% M/M) and France (0.6% M/M), rose slightly in Ireland (0.3% M/M) and stabilized in Germany and Spain. Consumers were probably attracted by strong discounting due to the summer sales, but the outlook is bleak as consumer sentiment weakened sharply in August which might have encouraged consumers to cut back spending.