| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Index | -24.5 | -29.7 | -25.1 | -25.4 |
Highlights
The January survey revised down the improvement in confidence at the start of the year and forecasts a surprising deterioration in mid-quarter. The climate indicator this month was trimmed from minus 25.1 to minus 25.4 while February is expected to see a drop to minus 29.7. Confidence duly remains historically soft.
Economic expectations were markedly weaker in January, falling from December's minus 0.4 to minus 6.6. Income expectations were even weaker, sliding to minus 20.0 from minus 6.9. Not surprisingly therefore, buying intentions were also pared back and at minus 14.8, the sub-index was 6.0 points lower on the month. However, only the economic outlook was worse than a year ago.
Still, the latest data warn that the apparent improvement in sentiment around the turn of the year was not so much a change in trend but a temporary blip and bodes ill for consumer spending over the near-term. Today's disappointingly soft update puts the German RPI at minus 39 and the RPI-P at a lowly minus 44. Both readings show economic activity in general continuing to lag market expectations by some distance.
Economic expectations were markedly weaker in January, falling from December's minus 0.4 to minus 6.6. Income expectations were even weaker, sliding to minus 20.0 from minus 6.9. Not surprisingly therefore, buying intentions were also pared back and at minus 14.8, the sub-index was 6.0 points lower on the month. However, only the economic outlook was worse than a year ago.
Still, the latest data warn that the apparent improvement in sentiment around the turn of the year was not so much a change in trend but a temporary blip and bodes ill for consumer spending over the near-term. Today's disappointingly soft update puts the German RPI at minus 39 and the RPI-P at a lowly minus 44. Both readings show economic activity in general continuing to lag market expectations by some distance.
Market Consensus Before Announcement
Consumer climate is expected to rise to minus 24.5 in February's report after a 2.5 point rise to minus 25.1 in January that marked a second month of improvement.
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.
