Germany: Consumer confidence reaches over 13-year high
January 28, 2015
The mood among German consumers in January improved for a third consecutive month. The forward-looking consumer confidence indicator published by the GfK increased from 9.0 points in January to 9.3 points for February, coming in above the 9.1 points that markets had expected. Consumer confidence has not been this high since November 2001. According to GfK, consumers, “consider the German economy to again be on an upward trend,” and the strong reading to a large extent reflects that, “consumers have evidently […] been affected by the major collapse in energy prices over the past few weeks. Reduced costs of fuel and heating oil are boosting disposable income, giving consumers greater freedom for other spending or purchases.”
In addition to the overall consumer confidence indicator, which estimates consumer confidence in the coming month, the GfK elaborates on three sub-indicators, which refer to the previous month. In January, households’ expectations for the overall economy recorded a second consecutive notable increase. GfK noted that, “German consumers feel that their economy is currently enjoying a renewed upswing.” In addition, consumers’ willingness to buy rose for a fifth straight month, reaching the highest level since January 2007, and their income expectations also improved.