Germany: Consumer confidence jumps to highest level in over seven years
June 25, 2014
The forward-looking consumer confidence indicator elaborated by the GfK climbed from a revised 8.6 points in June (previously reported: 8.5 points) to 8.9 points in July. The reading, which marked the highest level since December 2006, beat market expectations of 8.6 points.
In addition to the overall consumer confidence indicator, which projects confidence for the coming month, the GfK elaborates three sub-indicators which refer to June. According to GfK, consumers’ economic expectations hit the highest level in three years and their willingness to buy increased notably compared to May. The improvement in households’ willingness to buy was buoyed by the European Central Bank's recent decision to cut interest rates, which has affected Germans’ propensity to save and increased their willingness to spend more money. That said, the income expectations sub-indicator was virtually unchanged over the previous month.
Author: Ricardo Aceves, Senior Economist