| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Index | -26.2 | -26.5 | -25.5 | -25.6 |
Highlights
The September survey confirmed a slight deterioration in confidence at quarter-end and expects a further fall in October. From a marginally softer revised minus 25.6 this month, the climate indicator is forecast to drop to minus 26.5, slightly weaker than the market consensus.
Income expectations in September were little changed, slipping just 0.2 points to minus 11.3. This was still a sizeable 56.4 points stronger than a year ago. Economic expectations improved, rising by nearly 3 points to minus 3.4, similarly well above their minus 21.9 post in September 2022. The propensity to buy stood at minus 16.4, up from minus 17 in August and minus 19.5 a year ago.
While the latest data suggest that consumer confidence is beginning to stabilise, it is only doing so at historically weak levels. As such, household consumption looks likely to remain subdued through year-end, boosting the chances of recession in the Eurozone's largest member state. However, with the German RPI at 19 and the RPI-P at 22, economic activity in general is still performing rather better than market expectations.
Income expectations in September were little changed, slipping just 0.2 points to minus 11.3. This was still a sizeable 56.4 points stronger than a year ago. Economic expectations improved, rising by nearly 3 points to minus 3.4, similarly well above their minus 21.9 post in September 2022. The propensity to buy stood at minus 16.4, up from minus 17 in August and minus 19.5 a year ago.
While the latest data suggest that consumer confidence is beginning to stabilise, it is only doing so at historically weak levels. As such, household consumption looks likely to remain subdued through year-end, boosting the chances of recession in the Eurozone's largest member state. However, with the German RPI at 19 and the RPI-P at 22, economic activity in general is still performing rather better than market expectations.
Market Consensus Before Announcement
Consumer climate is expected to fall to minus 26.2 in October's report after minus 25.5 in a September report that included declines in income expectations and the economic outlook.
Definition
GfK's consumer climate survey asks around 2,000 German consumers every month about their assessment of economic conditions. The questions focus on economic and income expectations and consumers' willingness to buy. Having calculated the differences between the positive and negative responses for each question the results are synthesized into a single number that reflects overall consumer expectations for the coming month.
Description
Any insight into household expenditure is vital to understanding how the economy as a whole is shaping up. The monthly correlation between the GfK consumer gauge and actual spending is not especially high but trends in the index can offer useful information about potential underlying developments in consumer behavior. As a forward looking indicator, the GfK index is one input used by analysts in the construction of their forecasts of future German retail sales.
