German retail sales declined in November

German retail sales fell unexpectedly in November as plans by Chancellor Angela Merkel to raise value added tax weakened consumer confidence

Household spending in Germany, Europe’s biggest economy, stagnated since 2001 as job cuts at companies including Deutsche Bank AG and Siemens AG pushed unemployment to the highest since World War II. With companies including Adidas-Salomon AG, the world’s second-largest maker of sporting goods, now saying they plan to hire workers this year, consumer confidence is starting to recover.
The increase in VAT to 19 percent from 16 percent, planned for January 2007, may also boost retail sales this year as consumers bring purchases forward.

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