German retail sales slump at fastest rate in 11 years

German retail sales plummeted by 4.3 percent on the month in December, the fastest rate in 11 years, data released by the state statistics office on Thursday showed, sending a worrying signal about household spending in Europe’s biggest economy.

The fall in real terms was far weaker than a Reuters consensus forecast for a 0.6 percent drop.

Sales also fell by 2.1 percent year-on-year, Germany’s Federal Statistics Office said in a statement.

A spokesman said the fall, the sharpest since 2007, was partly due to the comparison with a strong November which was boosted by pre-Christmas shopping and one-off discount days like Black Friday.

Household spending has become a key growth driver in recent years as Germans benefit from record-high employment and low borrowing costs but retail sales are a volatile indicator often subject to revision.

The figures follows a pickup in consumer sentiment heading into February, shown by the GfK indicator this week, although shoppers grew more pessimistic about the economy due to worries about trade disputes and Brexit. German inflation remained moderate in January.