German consumer climate is falling slightly again
In August of this year, the consumer mood in Germany did not present a unified image. While the economic outlook improved, the outlook for income and the tendency to buy slightly fell. GfK forecast a slight decrease in the September consumer climate from 0.1 points compared to the previous month to 10.5 points.
Despite turbulent political times around the world, the economic outlook – at least initially – has stalled for several months and has increased markedly. However, income forecasts have declined, and the tendency to buy has fallen somewhat. Both indicators are still showing a generally good level. Since the tendency to save has remained almost unchanged this month, the consumer mood has declined slightly.
Economic optimism is once again growing
Economic optimism, which has been falling with small interruptions since the beginning of 2018, continued to decline in August. The index rose significantly from 6.5 to 22.2 points. Compared to last year, the current figure represents a point of eight good points.
It remains to be seen whether this will become the trend. This indicator is currently supported by current economic developments. According to data published recently by the Federal Statistics Office of Germany for GDP for the second quarter of 2018, the economic dynamism in Germany has moved somewhat forward. GDP rose by 0.5 percent in the second quarter compared to the previous period. In the first quarter, there was a somewhat weaker increase of 0.4 percent. Compared to the previous year, the adjusted rate of profit was 2.3 per cent and 2.0 per cent, respectively, for the price and valuation
Despite the trade conflict with the US as well as rising energy prices, the German consumer is once again showing greater economic optimism. They believe in the direction of strong growth of the German economy.
Decrease in income forecast
Contrary to economic expectations, this month’s earnings forecast fell somewhat. The index fell 4.9 points to 52.6 points. A lower value was measured in November 2017 at 47.9 points. Compared to this month last year, this is a decrease of 8.8 points. Despite the current decline, the level of the income index remains high.
It is difficult to derive the exact causes of this regression. The recent high energy prices, which have fueled inflation to the current 2 per cent, are likely to overlap with excellent labor market conditions, as well as a strong increase in income. Based on the continued low interest rate, it may be obvious to some consumers that savings are increasingly losing value due to inflation.