German GfK consumer climate falls, household consumption growth unlikely to accelerate in Q3

The German GfK consumer sentiment survey for September indicated that the downward trajectory in consumer confidence was maintained, with the headline index falling slightly to 10.5 from 10.6. This is the lowest since last June. Income expectations deteriorated, in spite of the very tight labor market and evidence of higher pay growth.

Consumer willingness to spend fell a bit as well, to lowest level in 13 months. On the contrary, economic optimism was up, with consumers showing little concern regarding the rise of protectionism and increased energy prices. Nevertheless, the relevant index rose to 22.2 from 15.7.

“Overall the data appear to suggest that we should not expect a notable acceleration in German household consumption growth this quarter after the unimpressive rise of only 0.3 percent Q/Q in Q2”, added said Daiwa Capital Market Research in a report.

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