| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Index | -27.0 | -27.8 | -28.1 | -28.3 |
Highlights
The November survey revised slightly steeper the decline in confidence in mid-quarter but forecasts a modest improvement for year-end. The climate indicator in November was trimmed from minus 28.1 to minus 28.3 and in December is expected to edge up to minus 27.8, again on the soft side of the market consensus.
Income expectations continued to decline in November, this time by 1.4 points versus the previous month to minus 16.7, their lowest reading since March. However, compared with a year ago, the sub-component was up nearly 38 points. Economic expectations were essentially unchanged at minus 2.3, just 0.1 point higher than in October and 15.6 points stronger than in the same month in 2022. Lastly, the propensity to buy gained 1.3 points to minus 15.0 but this was still very weak and only 3.6 points above its mark a year ago.
The latest data suggest that overall consumer confidence is beginning to stabilise but at low enough levels to suggest no near-term recovery in household spending which may well be a drag on fourth quarter GDP growth. Today's update reduces the German RPI to minus 6 and the RPI-P to minus 8. Both readings show economic activity in general just slightly lagging market expectations.
Income expectations continued to decline in November, this time by 1.4 points versus the previous month to minus 16.7, their lowest reading since March. However, compared with a year ago, the sub-component was up nearly 38 points. Economic expectations were essentially unchanged at minus 2.3, just 0.1 point higher than in October and 15.6 points stronger than in the same month in 2022. Lastly, the propensity to buy gained 1.3 points to minus 15.0 but this was still very weak and only 3.6 points above its mark a year ago.
The latest data suggest that overall consumer confidence is beginning to stabilise but at low enough levels to suggest no near-term recovery in household spending which may well be a drag on fourth quarter GDP growth. Today's update reduces the German RPI to minus 6 and the RPI-P to minus 8. Both readings show economic activity in general just slightly lagging market expectations.
Market Consensus Before Announcement
Consumer climate is expected to rise barely to minus 27.0 in December's report after minus 28.1 November which was its third successive fall and the weakest result since April.
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.
