Eurozone retail sales figures released yesterday by Eurostat point to a consumer slowdown in April, adding to a difficult week of economic data for the region. Higher energy costs tied to the conflict in the Middle East may be squeezing household budgets and dampening spending appetite.

• Retail sales across the eurozone fell 0.4% in April compared to March, worse than the 0.3% decline economists had expected and a sharp reversal from the 0.8% gain in March.
• Non-food products and automotive fuel led the decline, falling 0.9% and 2.7%, respectively, while the food, drinks and tobacco category was the only one to post a gain, rising 0.9%.
• On a year-over-year basis, retail sales growth slowed considerably to just 1.0% in April, down from 2.1% in March.
• Among individual countries, the steepest monthly drops were recorded in Denmark, Romania, Belgium and Slovakia, while Lithuania, Malta and France managed modest gains.

The retail sales data echoes this week’s purchasing managers’ index figures, which showed the sharpest contraction in eurozone private sector activity since November 2024. Rising input costs and weakening consumer demand appear to be reinforcing each other, painting a cautious picture for European economic growth in the months ahead. The European Central Bank will have plenty to weigh at its upcoming policy meeting. 

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.