| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Index | -27.0 | -25.1 | -27.8 | -27.6 |
Highlights
The December survey revised slightly larger the improvement in confidence at year-end and forecasts a further gain at the start of 2024. The climate indicator in December was lifted minus from 27.8 to minus 27.6 and in January is expected to rise to minus 25.1, still historically soft but on the firm side of the market consensus.
Income expectations in December stood at minus 6.7, up from November's minus 16.7 and minus 43.4 a year ago. This was their highest reading since July. Economic expectations stood at minus 0.4, up from minus 2.3 last time and minus 10.3 in December 2022. Lastly, the propensity to buy rose from minus 15.0 to minus 8.8, a 7.5 point increase from a year ago and its strongest print since March 2022. However, this month's outturn was still well below the levels seen before the Covid lockdowns.
The latest data suggest that overall consumer confidence is beginning to improve. Even so, it remains at a soft enough level to warn of no near-term recovery in household spending which may well be a drag on fourth quarter GDP growth. Today's updates put the German RPI at minus 31 and the RPI-P at minus 34. Both readings show economic activity in general continuing to lag market expectations.
Income expectations in December stood at minus 6.7, up from November's minus 16.7 and minus 43.4 a year ago. This was their highest reading since July. Economic expectations stood at minus 0.4, up from minus 2.3 last time and minus 10.3 in December 2022. Lastly, the propensity to buy rose from minus 15.0 to minus 8.8, a 7.5 point increase from a year ago and its strongest print since March 2022. However, this month's outturn was still well below the levels seen before the Covid lockdowns.
The latest data suggest that overall consumer confidence is beginning to improve. Even so, it remains at a soft enough level to warn of no near-term recovery in household spending which may well be a drag on fourth quarter GDP growth. Today's updates put the German RPI at minus 31 and the RPI-P at minus 34. Both readings show economic activity in general continuing to lag market expectations.
Market Consensus Before Announcement
Consumer climate is expected to rise to minus 27.0 in January's report after a 1.5 point rise to minus 27.8 in December which ended three months of deterioration.
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.
