Germany: Consumer confidence rises to five-year high
October 26, 2012
The forward-looking GfK consumer confidence indicator for November rose to 6.3 points from a revised 6.1 points recorded in October (previously reported: 5.9 points). The reading exceeded market expectations, which had seen the index remaining unchanged at the original 5.9 points reported in October. The November result represents, in fact, the highest level in the index since October 2007, as rising concerns among consumers that the economy would enter into recession appear to be diminishing. While the overall consumer climate indicator refers to November, its sub-indicators refer to October. The economic expectations sub-index improved modestly over the previous month, as households appear to be less concerned that the economy would enter into recession. In addition, consumers' income expectations improved in October, after the sub-indicator fell for three consecutive months. Finally, consumers' willingness to buy increased compared to the previous month, on the back of households' rising wages and the healthy state of the German labour market. In September, unemployment dropped to 6.5% from 6.8% in August, which represents the lowest level in more than two decades.
Author: Ricardo Aceves, Senior Economist