German Retail Sales to Grow in June but Job Losses Threaten Rebound

German [B]Retail Sales[/B] are set to grow 0.9% in the year to June, the first time annualized growth turns positive in five months. The improvement likely owes to the government’s 85 billion euro stimulus plan, which includes spending, tax breaks, and a 2500 euro payment to consumers who trade in their old car and buy a new one. Seasonal forces are also likely to have helped the metric higher, with many German stores running discounting campaigns during the summer. Markit, leading provider of financial information services, said last week that the recent rebound in retail activity was “generally attributed [to] promotional activity.” Looking ahead, weakness in the labor market is likely to keep underlying consumer demand lackluster as the effects of fiscal policy fade and stores run out of room to mark down prices as profit margins narrow. The jobless rate held at a 19-month high of 8.3% in July and the OECD has forecast it will top 11% next year, weighing on disposable incomes and discouraging spending