German retail sales slumped 1.5 percent in August amid expectations for a 0.2 percent increase from previously 0.7 percent decline in July. Sales plunged 2.6 percent annually while economists expected a small contraction of 0.8 percent versus a revised 0.8 percent drop in July. A breakdown of the data shows that most of the decline in August sales came from clothing and shoes. Clothing and shoe sales declined 5.9% versus a 3.0 percent increase in July. Although we saw better than expected unemployment data yesterday as Germany’s unemployment rate came down from its highs to 8.2 percent, consumption is still depressed by fear of higher unemployment throughout the euro-zone. Domestic and euro-zone demand remain subdued as effects economic stimulus packages is starting to wear off for the largely export dependent Germany.