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Famously frugal, the Germans are now on an epic shopping spree

People look at traditional ginger bread on sale at the famous Oktoberfest in Munich September 28, 2012. Millions of beer drinkers from around the world will come to the Bavarian capital for the 179th Oktoberfest, which runs until October 7. REUTERS/Michaela Rehle (GERMANY - Tags: ENTERTAINMENT SOCIETY TPX IMAGES OF THE DAY)
Reuters/Michaela Rehle
I’ll take a dozen.
By Matt Phillips
Published Last updated This article is more than 2 years old.

Germany’s parsimonious consumers are on a shopping spree the likes of which has not been seen in decades.

In January retail sales jumped 5.3% compared to the prior year. That’s the highest year-on-year change seen since at least the mid-1990s.

Why? For much the same reason that Americans are feeling better lately: Falling gasoline costs and tight labor markets are driving improvement in real—that is, inflation-adjusted—earnings.

Everybody knows that Germany is the economic powerhouse in a euro zone chock-a-bloc with wheezing economies. But while it might smart for struggling economies to see signs of a spending surge in Deutschland, it’s important for them to remember that this is precisely what the euro zone needs. Indeed, it’s exactly the kind of consumption-led economic shift that weaker European economies have been hoping for, as increased German consumption provides markets for goods and services from the country’s important European trading partners.

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