UPDATE: German Retail Sales Plunge Unexpectedly In June

FRANKFURT -- German retail sales plunged again in June, indicating that households are capping spending in light of the economic uncertainties and deteriorating labor market prospects.

Retail sales dropped by a real 1.8% in June from May, and declined 1.6% from June 2008, the Federal Statistics office said Monday.

The outcome was weaker than expected, marking the sharpest monthly fall since December 2007, when retail sales were down 2.2%.

Economists polled by Dow Jones Newswires Friday had forecast a 0.5% monthly rise in retail turnover in June on falling consumer prices and the government's economic stimulus measures.

German retail sales were down a real 2.1% in the first six months of 2009, compared with the same period a year earlier.

Food, drinks and tobacco sales dropped by a real 1.3% from June 2008, while nonfood sales declined 1.4% over the same period, the statistics office said.

The data are based on figures from seven German states, accounting for about 76% of total sales. They don't include car sales, which were boosted by the German government's car-scrapping incentives.