IHS Markit release earlier today showed that headline figure for German retail PMI, which measures month-on-month changes in sales pointed to the strongest month-on-month rise in sales since March. However, the year-on-year measure showed a slight slowing in growth.

German headline retail PMI was up from 52.0 in July to a five-month high of 54.1 in August. Details of the report showed that gross margins declined for second consecutive month as average purchase costs rise at fastest pace since May 2015. Increased purchasing activity led to a further accumulation of inventories during August.

Sales targets were missed for the third month running in August, with the degree of underachievement the most marked since January. Nonetheless, retailers are optimistic that next month’s actual sales will be higher than planned. Jobs growth was maintained in August. However, the rate of job creation slowed since July and was the weakest in four months.

“The positive PMI results paired with healthy employment and wage growth suggest that consumer spending should continue to expand, with the latest IHS Markit forecast predicting growth of 1.6% for 2016 as a whole.” said Oliver Kolodseike, Economist at IHS Markit.