Household demand remains depressed. Retail sales came in slightly worse than expected and dropped more than 3% yoy in September. Lower number of working/trading days is partly to blame; however, even after adjustment for calendar effect the figure is weak and points to sluggish demand.
Reasons are obvious. Labor market provides explanation. Unemployment started to climb higher again. Jobless rate (calculated by ILO methodology) rose to 7.0% in Q3 from 6.5% a year earlier. Real wages dropped by 0.3% yoy in Q1 and 1.1% in Q2. Data about collection of PIT and social security contributions suggest that the decline in real wages is even steeper. Moreover, households get more cautious and both, gross and net savings rate increased recently.
Sales decreased in majority of retail segments. It is easy to explain the drop in sales of durable goods, but food sales also significantly declined. Clothing and footwear were the only exception with sales supported by 4% drop in prices.
Contribution of household expenditures to GDP is likely to be negative again in Q3. In 2012, our forecast assumes retail sales to decline by 0.5%-1.0%.
Actual (Sep): -3.3% yoy
Consensus: -2.9% yoy
Previous (Aug): -0.8% yoy