Sharp drop in Norway's retail sales

Norwegian retail sales fell sharply in May with 3,4% m/m. 

The sharp downturn in May retail sales must be seen in relation to the strong April figure at +2,0%, notes Nordea Bank. However that move is more than reversed with today's figure and what looked like solid growth in private consumption now looks mode moderate.

Retail sales have been fairly strong since the beginning of the year and indicated that private consumption is keeping up well despite the downturn in the oil sector. The figure today brings retail sales down to levels seen through 2014 and signals more moderate growth in private consumption.

It is hard to put too much weight on these figures as they clearly are volatile. However, it is a signal that recent strength in retail sales was exaggerated and that private consumption is growing slower. Thus is supports the case for a 25bp rate cut in September, says Nordea Bank.