FRANKFURT (AFP) –
German retail sales fell for the second consecutive month in September, a sign that household demand remains weak amid persistent fears that unemployment will climb in the coming months.

September retail sales declined 0.5 percent from August, catching analysts off guard, figures released on Friday by the federal statistics office showed.

Experts polled by Dow Jones Newswires had forecast an increase of 0.7 percent after sales plummeted 1.8 in August.

On a 12-month comparison, retail sales were down 3.9 percent in September, the Destatis office said.

UniCredit economist Alexander Koch noted that car sales, which are not included in the retail sales data, were down by 1.9 percent on the month as the sector suffers from the withdrawal of a state "cash-for-clunkers" auto subsidy.

Household earnings have come under pressure meanwhile despite widespread use of short-time work schemes by companies that allow them to retain workers while having the government pay for part of their wages and social contributions.

So despite inflation remaining essentially at zero, a moderately energized economy and modest tax cuts that are to kick in next year, weak consumption will begin to weigh on German growth, Koch forecast.

"The German economy grows again but private households are still likely to face a consumer recession," he said.