Germany: Consumer confidence improves, ending string of three consecutive declines
June 28, 2011
Consumer confidence improved amid ongoing strong economic growth. In July, the forward-looking consumer confidence indicator published by the GfK Institute rose to 5.7 points from a revised 5.6 points in June (previously reported: 5.5 points) and overshot market expectations that had seen the index falling to 5.3 points. The reading represented the first improvement after three consecutive months of declining consumer sentiment. Along with the overall consumer confidence indicator, which refers to July, the GfK Institute publishes three sub-indices (economic expectations, income expectations and buying propensity), which refer to June. According to the Institute, all sub-indices improved over the previous month, in particular income expectations, which climbed by 18.7 points over the previous month to 44.6 points in June, the highest level since November 2010. The reading was fuelled by the ongoing positive developments in the labour market and better economic prospects, which, according to the survey, influenced an improvement in the sub-index of economic expectations in June after four consecutives declines. The propensity to buy improved in June, following a slight decline in the previous month. The reading benefited from consumers' better economic and income expectations, as well as a more positive assessment about the labour market. In June, the unemployment rate fell to 6.9% from 7.0% in May, the lowest level since records for the reunified country began in 1991. According to the GFK Institute, positive economic results and a vital labour market encourage consumers' to plan for larger purchases in the months ahead.
Author: Ricardo Aceves, Senior Economist