German Consumer Confidence to Rise on Stronger Growth, More Jobs, GfK Says
Aug. 26 (Bloomberg) -- Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc, talks about Germany's economy and its impact on the rest of Europe. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Excerpt. Source: Bloomberg)
German consumer confidence will rise in September as stronger economic growth and declining unemployment boost income expectations, GfK AG said.
GfK’s consumer sentiment index, based on a survey of about 2,000 people, will climb to 4.1 from a revised 4 in August, the Nuremberg-based market research company said in an e-mailed statement today. Economists forecast the index to climb to 4 from a previously reported 3.9, the median of 20 estimates in a Bloomberg News survey shows.
German households may grow more confident after the economy expanded at a record pace in the second quarter, business confidence surged to a three-year high in August and unemployment declined in July. The Bundesbank on Aug. 19 raised its German growth forecast for this year, saying that the “growth tempo will normalize” in the second half.
“German consumers hold the key to self-sustained growth,” said Carsten Brzeski, senior economist at ING Group in Brussels. “The improvement in the labor market and particularly the increase in employment bode well for a further pickup of private consumption in the second half of the year.”
The euro rose after the report and traded at $1.2717 at 9 a.m. in Frankfurt.
‘Positive Trend’
“Consumers clearly don’t believe the recovery of the German economy to be a flash in the pan but rather expect it to continue,” GfK said in a statement. Faster hiring “probably also contributed to a positive trend in the consumer mood.”
Unemployment fell for a 13th month in July, pushing the adjusted jobless rate to 7.6 percent from 7.7 percent. That’s the lowest since November 2008. Consumer spending rose 0.6 percent in the second quarter, its first gain in a year.
GfK’s measure of households’ economic expectations jumped to 46.6 in August, the highest in three years, from 36.8 in July. A gauge of income expectations increased to 36 from 29.1, while an index of consumers’ willingness to spend held at 27.9.
Inditex SA, Europe’s biggest clothing retailer, is in talks with landlords to open more stores in Germany, Financial Times Deutschland reported Aug. 12. Henkel AG, the German maker of Persil detergent, on Aug. 4 raised its full-year earnings outlook after second-quarter profit almost doubled.
“What is coming through more and more is evidence of improving domestic demand,” Goldman Sachs Group Inc. Chief Global Economist Jim O’Neill said in an interview on Bloomberg Television’s “InsideTrack” with Deirdre Bolton yesterday. “It’s been such a long time since the German consumer has been spending. If it were for real, it’s going to turn out to be major.”
To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net
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