Nov 5 (Reuters) - Euro zone retail sales fell unexpectedly

in September from the previous month, data showed on Thursday,

pointing to weak consumer demand and putting a question mark

over the strength of any economic recovery.

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Table: Story:

KEY DATA

EMU-16 Sep Aug Jul Jun May Apr

Total retail M/M -0.7 -0.1 -0.2 0.0 -0.5 0.2

Y/Y -3.6 -2.3 -1.8 -2.0 -3.2 -1.9

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ECONOMIST COMMENTS

NICK KOUNIS, FORTIS:

'These figures show that outside of cars, consumer spending

is really lacklustre. The positive impact we have had on

consumer spending from cars is starting to dissipate and reverse

around the turn of the year.

'This reflects the fact that the labour market continues to

deteriorate and there is still a lot of bad news ahead for the

labour market.

'Unemployment will continue to rise in the course of next

year and wage growth has remained quite resilient, but is likely

to slow quite sharply.

'Domestic demand is not going to be part of it (recovery)

any time soon.

'These are consistent with the idea that the recovery will

be moderate over the coming quarters.'

JENNIFER MCKEOWN, CAPITAL ECONOMICS:

'September's fall in euro zone retail sales suggests that

consumers did not contribute to the likely increase in economic

activity in Q3.

'The 0.7 percent monthly fall in sales was weaker than the

consensus forecast of a 0.2 percent gain, but broadly in line

with our own forecast after last week's disappointing German

data.

'In Q3 as a whole, euro zone sales fell by 0.6 percent --

double the contraction seen in Q2. Together with earlier data

showing a very sharp slowdown in new car registrations growth,

this suggests that total consumer spending will have fallen in

Q3 after stagnating in the second quarter.

'Thankfully, other monthly data and surveys suggest that

improvements in investment and possibly net trade will still

have pulled the economy out of recession in Q3. But, looking

ahead, the strength of the recovery will depend heavily on an

improvement in consumer spending.

'Recent German tax cuts and a pick-up in consumer confidence

are encouraging and for now we expect a moderate consumer

recovery next year. But with credit still weak and wage growth

set to drop, the risks are on the downside.'

LINKS

For further details, Reuters 3000 Xtra users can click on:

http://europa.eu.int/comm/eurostat/

For a one-page snapshot of real-time G7, euro zone and Swiss

economic data releases, click on

Keywords: EUROZONE ECONOMY/RETAIL

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