German consumers are set to start the new year in upbeat mood, expecting both the country’s economic outlook and their own income to rise.
GfK market research group said Friday that its forward-looking consumer climate index is set to increase to 10.8 points in January from 10.7 points in December. Economists surveyed by The Wall Street Journal had forecast a reading of 10.8 points.
Consumers currently expect the German economy to display a “strong upward trend,” GfK said, adding that the failed attempts to form a “Jamaica” coalition between the Christian Democrats, the Free Democrats and the Greens seemingly haven’t had any lasting damage on consumer mood.
GfK uses three sub-indexes for the current month to derive a sentiment figure for the upcoming month.
Consumers’ economic expectations rose to a three-and-half-year high of 45.2 points in December from 44.3 points in November, while income expectations increased more significantly, to 54.3 points from 47.9 points, GfK said.
The “excellent health” of the German job market is the reason behind this great optimism, GfK said.
The propensity-to-buy sub-index, which measures consumers’ willingness to spend on big-ticket items, declined slightly to 57.1 points in December from 58.5 points in November, but it is still comfortably above the 48.0 point level measured in December 2016, GfK said.
Source: Dow Jones