Italian retail sales dropped in January at the fastest rate in four years as accelerating inflation coupled with a bleaker economic outlook discouraged consumers from spending, according to the latest reading given by the Bloomberg purchasing managers index. The seasonally adjusted index of retail sales dropped to 43 from 44.7 in December. The index is based on a monthly survey of 440 executives compiled for Bloomberg by NTC Economics. The reading has remained below 50, the level that signals a contraction in sales, since February 2007.
About 33 percent of retailers surveyed said they missed their sales targets this month, with only 5 percent reporting they beat their expectations. ``Weak economic conditions and poor disposable income'' were to blame, NTC said. Hiring by retailers fell in January for the first time since October to a 15-month low, partly because workers who quit were not being replaced, the report said.