Mixed signals from Hungary.

A series of reports filed on the Interfax Central Europe wire paint a mixed portrait of Hungary's consumer spending. For example, a June 25, 2007 story, citing Hungary's Central Statistical Office (KSH) as the source, said that retail sales declined in April 2007 2.5 percent when compared with the same month in 2006. Retail sales for the first four months of 2007 declined as well, 0.4 percent, when compared with the first four months of 2006.

Interfax said, "Declines were seen across every sector." Food sales were down 0.8 percent in April 2007 compared with April 2006, and similarly non-food sales also dropped 3.8 percent. Car Sales were down 16.6 percent.

Slower retail contrasts with declining unemployment as reported in a June 28, 2007 Interfax story. Unemployment in the March 2007-May 2007 period was 7.3 percent compared with unemployment of 7.5 percent from February 2007-April 2007.

Interestingly, as Interfax reports on June 25, 2007, the country's central bank cut its benchmark interest rate to 7.75 percent in spite of forecasts that there would be no rate cut because the most recent wage data was higher than expected. The Monetary Policy Committee (MPC) acted because inflation for the period stabilized at 3.0 percent, and the MPC felt there no danger of "persistently high inflation."