Eurozone Retail Sales Slip 0.7%, Undershoot Forecasts

Eurozone consumer spending lost momentum in May, with retail sales shrinking 0.7% from the previous month, Eurostat data showed on Monday. The decline was slightly deeper than the 0.6% drop economists had expected and reversed a revised 0.3% gain in April. On an annual basis, sales still rose 1.8%, but the pace slowed from 2.3% the month before. The figures suggest households remain cautious even as inflation recedes, challenging the European Central Bank’s hopes for a consumption-led rebound in the second half of the year. Weakness was echoed elsewhere in the region: separate data indicated Hungarian retail sales cooled more than anticipated after an Easter-related bump, underscoring the fragility of demand ahead of next year’s elections. The euro slipped below $1.18 in early trading as investors weighed the softer data against the ECB’s gradual policy-easing path.