Private consumption is an important pillar for the economy. However, the purchasing mood in Germany has been dampened for some time.
The mood among consumers in Germany remains poor. The economic climate index of the Nuremberg-based consumer research companies GfK and NIM recovered slightly by 0.7 points in September thanks to higher income expectations. However, at minus 21.2 points, it remains well below the long-term value of plus ten points, as the institutes announced on Thursday.
Mood unstable
The Nuremberg consumer experts do not see this as a decisive turning point. “After the severe setback in the previous month, the slight improvement in the consumer climate can be interpreted as stabilization at a low level,” said NIM consumer researcher Rolf Bürkl. The consumer climate has not progressed since June, when minus 21 points were measured. “That is why the slight increase cannot be interpreted as the start of a noticeable recovery,” said Bürkl. “The current mood among consumers is generally too unstable for that.”
In addition to negative factors such as wars, crises and inflation, the labor market has again been a factor affecting the consumer climate in recent months. Unemployment is rising slightly, reports of corporate bankruptcies are increasing and announcements of staff cuts at large companies are leading to restraint and caution among consumers.
Income expectations are rising
At least people in Germany have become somewhat more optimistic again with regard to their income expectations. Inflation in Germany has stabilized at around two percent, while wage increases and pensions have increased significantly more. However, income expectations had suffered a severe setback just last month, which could only be partially offset.
The improved assessment of the income situation also means tailwind for the propensity to buy. Although this is still low, it recently reached its highest level since March 2022
Source: Stern
