Germany: Consumer confidence set to inch up at the outset of the new year
December 22, 2017
The forward-looking consumer confidence indicator published by the GfK Group for January increased to 10.8 points, up from 10.7 for December. German consumers are seemingly still confident despite prolonged political uncertainty following the federal elections in September 2017, which complicated the formation of a new government. Moreover, the failure of the “Jamaica” coalition in November appeared not to have influenced consumer confidence negatively.
Backward-looking confidence indicators for December showed that German consumers’ view on the economy and their income improved, while their propensity to buy deteriorated slightly. In fact, the outlook on the economy reached a three-and-a-half year high in December; consumers judged the German economy to be in a strong upward trajectory and expected it to carry over into 2018, primarily due to strong labor market dynamics Income expectations, meanwhile, registered the first improvement in four months: The robust job market is driving up wages and hence increasing consumers’ income expectations. Consumers’ propensity to buy, on the other hand, slipped in December but remains positive territory.
Author: Jan Lammersen, Economist