Germany: German consumers turn more optimistic heading into July
June 29, 2016
In July, the mood among German consumers continued to improve. The forward-looking consumer confidence indicator published by the GfK Group edged up from June’s 9.8 points to 10.1 points in July, marking the highest reading in nearly a year. Overall, the GfK commented that, “unlike the weather, the mood among German consumers in early summer 2016 is bright.”
In addition to the overall consumer confidence indicator, which estimates consumer sentiment in the coming month, the GfK elaborates on three sub-indicators, which refer to June. Households’ expectations for the overall economy continued to strengthen in June, moving comfortably into positive territory. Regarding the potential impact of latest political development in the UK, the GfK noted that, “the British referendum on leaving the EU on June 23 has not yet affected economic mood as the survey had already been completed at this point. However, it is expected that the current uncertainty in the financial markets will also be felt by German consumers.” Income expectations also improved, reaching the highest level since reunification. In the GfK’s view, income expectations are supported by a solid labor market, new wage agreements, July’s planned increase in the state pension and subdued inflation. Conversely, consumer’s willingness moderated somewhat in June, but still remaining at a high level.