The interpretation of the latest economic data on the German economy is more difficult than usual. Seasonally adjusted retail sales in December showed a clear minus of 4.3% compared to the previous month. However, the Federal Statistical Office points out, that the poor December reading could be related to a preference among German consumers for Christmas gift vouchers, which only show up in the data once they are spent. In general, the consumer climate remains very positive and has even improved again recently. Latest data on new orders in manufacturing raises questions, too. Based on provisional data, price-adjusted new orders decreased in December a seasonally and calendar adjusted -1.6% on the previous month. However, new orders without major orders increased a seasonally and calendar adjusted +3.5%. November data was revised upwards from -1.0% to -0.2% m/m after including major orders that were reported subsequently. More clarity on the situation of the German economy in late 2018 is likely to be provided by the Q4 GDP release on 14 February.
