Small recovery for German retail

German consumers returned to the shops on in January, fresh data suggested on Friday, raising prospects that Europe's biggest economy has rebounded after a lacklustre end to 2007.

Sales in Germany’s retail sector rose by 1.6 percent in January at constant prices from December and edged up 0.6 percent from the year-earlier period, figures from the federal statistics office showed.

According to preliminary data sales of non-food products rose 2.3 percent from last year but those of food, beverages and tobacco fell 1.9 percent, a statement said.

This compares with a weak December when worries about the economy and rising prices kept Germans away from the malls over the holiday period, causing a seven percent year-on-year plunge and a 0.2 percent drop from November.

This had dashed hopes among economists that German consumer spending was helping to compensate for an export sector hit by a strong euro and the effect was evident in a breakdown of fourth quarter economic data earlier this week.

Growth in economic activity had slowed to 0.3 percent in the final three months of 2007 from 0.7 percent in the previous quarter, data on Tuesday showed.

Exports again provided the biggest boost to activity but household spending fell 0.8 percent.