German Retail Sales Up A Bit In July: Where Are The Auto Sales Resulting From Germany's "Cash For Clunkers" Program?

Preliminary data show that German retail sales rose 0.7% in volume terms in July after declining in May and June. (Final data for total retail sales plus data on the composition of sales for the month of July will be available in about two weeks.) The value of retail sales rose only 0.1%, implying a decline in retail prices.  While the rise in retail sales is encouraging, its magnitude suggests a pretty lack luster consumer.   The first chart shows the volume, value and implied price level of Germany's retail sales.

Perhaps the reason that these data suggest such a lack luster consumer, is that they do not take into account the effect of the Government's program, paying people 2,500 Euros if they scrap their car and buy a new one, which began in January.  German retail sales data exclude sales of motor vehicles.   Combined wholesale and retail sales of cars and light trucks are available in the Manufacturing, Trade & Service Section of the Haver data base for Germany.  This series combining wholesale sales is not strictly comparable with the retail sales data and is available only through June. The increase in passenger car registrations is, perhaps, a better proxy for sales of new cars and this series, which is not seasonally adjusted, is available through July.  It, too, can be  found in the  Manufacturing, Trade & Services section in the Haver data base on Germany.  The year to year increases in these two series are shown in the second chart.  The  year to year increases in car registrations since January have been particularly striking and suggest that consumers have a higher propensity to spend than the retail sales data would suggest.