Germany Consumer Confidence September 2016


Mood among consumers is buoyant heading into September

In September, the mood among German consumers strengthened and reached the highest level in over a year. The forward-looking consumer confidence indicator published by the GfK Group edged up from August’s 10.0 points to 10.2 points in September, the best reading since June 2015. Overall, the GfK commented that the reading showed that, “good economic data have a stronger impact than terrorism and Brexit.”

In addition to the overall consumer confidence indicator, which estimates consumer sentiment in the coming month, the GfK elaborates on three sub-indicators, which refer to August. Households’ income expectations improved notably in August, regaining some of the lost ground from July’s drop, before which income expectations had reached the highest level since Germany’s reunification. In the GfK’s view, income expectations are supported by a solid labor market, subdued inflation and pay increases for employees and retirees. Consumer’s willingness to buy also rose in August, mainly reflecting very positive income expectations and that the labor market is in a very good shape. Households’ expectations for the overall economy moderated slightly in August, but remained comfortably in positive territory. In the GfK’s view, the small setback was “probably due to the three attacks in Bavaria in July 2016,” as it increased uncertainty about the general economic development. August’s release of solid GDP growth data for the second quarter of the year worked into the opposite direction and supported household’s economic expectations.

FocusEconomics Consensus Forecast panelists expect private consumption to expand 1.8% in 2016, which is unchanged from last month’s estimate. For 2017, panelists see private consumption growing 1.5%.

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Germany Consumer Confidence Chart

Germany Consumer Confidence September 2016

Note: GfK Consumer Climate Index.
Source: The GfK Group.

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