Eurozone retail sales stronger than forecast

Eurozone retail sales were stronger than expected in April, rebounding from a March slump despite rising inflation and a European Central Bank interest rate rise, data showed on Tuesday. The European Union's statistics office Eurostat said retail sales in the 17 countries using the euro, an indication of household demand, rose 0.9 percent month-on-month in April for a 1.1 percent year-on-year gain.
Economists polled by Reuters had expected a 0.4 percent monthly increase and a flat annual reading. "April's rebound in eurozone retail sales raises hopes that consumer spending will help support the region's economic recovery," said Martin van Vliet, economist at ING bank.
Economists noted however that fiscal tightening across the eurozone and rising commodity prices were likely to keep household spending in check. Sales increased despite inflation rising to 2.8 percent year-on-year in April, above the European Central Bank's target of below but close to 2 percent, on rising food and energy prices that cut into disposable income.