Retail sales in the euro zone posted surprisingly strong growth in August, according to data released today (pdf). The level of shopper zeal surpassed expectations, with August sales rising by 0.7% versus the previous month. The increase was paced by Spain and Portugal, of all places, with August sales in the recession-riddled, unemployment-addled Iberian neighbors rising by 3.8% and 4.8%, respectively.
Does this mean that the region has finally turned the corner? Some perky purchasing managers’ indexes, also released today, support this impression. But Mario Draghi, president of the European Central Bank, struck a cautious tone at his regular press conference yesterday, noting that the risks to euro zone growth remain “on the downside.”
To keep things in perspective, on a year-over-year basis, euro zone retail sales have been negative since mid-2011. And sales remain well below pre-crisis levels, particularly in places like Spain and Portugal. A few months of positive data do not a recovery make.