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Last Updated: Wednesday, 31 May 2006, 09:43 GMT 10:43 UK
German figures suggest recovery
Worker at VW factory in Dresden
Germany's economy seems to be recovering
Germany's retail sales rose in April, indicating that Europe's largest economy is improving, data shows.

Retail sales rose 2.8% in April compared to March, including seasonal adjustments, the Federal Statistics Office said.

But sales were 1% lower in real terms on a year-by-year basis, in contrast to analysts' expected 0.6% rise.

The data echoed an earlier consumer confidence survey, which showed that households are likely to spend more.

The retail sales data came as figures showed that Germany's unemployment rate also fell in May.

Unemployment was down to 11% in May, compared to 11.3% in April, according to seasonally-adjusted figures from the Federal Labour Agency.

One of the factors prompting greater job opportunities is the World Cup, both for employment in services and construction, the agency said.

French economy

However, while Germany's economy seems set for a recovery, data for France was not as positive.

Consumer confidence for May declined to a net -30, according to INSEE, France's National Statistics Office.

"We have extremely weak confidence and the only thing that could be a catalyst to help this would be a change in government," said Emmanuel Ferry, economist with Exane BNP Paribas.

However, French producer prices were up slightly less than expected, rising by 0.6% in April for the month, and 3.6% on a year-by-year basis.

Meanwhile, unemployment was lower in April at 9.3%, compared to 9.5% in March.

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