Germany: Consumer confidence expected to be largely unchanged in October
Consumer confidence is expected to inch up from minus 1.7 in September to minus 1.6 in October.
The projected uptick in the headline reading came on the back of more optimistic income expectations and economic expectations in September—backward-looking data for September was released at the same time and underpins the October estimate. Views on expected income improved due to a drop in the number of unemployed people and a sharp fall in the number of people on the short-time work scheme. Furthermore, the outlook on the economy turned rosier as consumers consider that the economy “is clearly on the road to recovery.” In fact, economic expectations reached its highest level in two years. That said, consumers’ propensity to buy decreased somewhat.
Rofl Bürkl, GfK consumer expert, commented: “The extensive support packages for business and consumers are clearly suitable measures to help Germany emerge from the worst recession since the war. The further course of the infection rate in Germany and the situation in the labor market will decide whether the previous month’s downturn remains a flash in the pan and whether consumer mood is able to recover in the coming months.”
However, Carsten Brzeski, chief Eurozone economist at ING, struck a slightly more cautious tone and stated: “Stagnating consumer confidence suggests that the consumption-driven rebound will not necessarily morph into a sustainable consumption-driven recovery.”