The manufacturing sector is benefiting from strong global growth and investment. That's particularly true in Germany, which tends to specialize in high quality capital goods.

We should see some small increases in retail sales over coming months, but without a decent pickup in the labor market and incomes, we won't see much of an improvement.

Consumers are still the weakest element within the recovery. European companies are still reluctant to hire, and it will take a long period of recovery before they start to do so.

Companies still aren't hiring, and until they do, it's hard to see strong consumer spending.