German consumer confidence set to improve in October - GfK
German consumer confidence is set to improve in October, boosted by the European Central Bank's latest stimulus package, according to a survey released by market research group GfK on Thursday.
GfK's forward-looking consumer sentiment index is expected to rise to 9.9 next month from 9.7 in September. Economists had been expecting an unchanged reading.
"In addition to the already familiar flashpoints such as a global economic slowdown, trade conflicts and Brexit discussions, the decision of European Central Bank (ECB) to further relax its monetary policy is having an impact on consumers in September," GfK said.
The income expectations index declined again, falling 3.3 points to 46.8, but GfK said this was still "a very good level".
"Being able to maintain this good level going forward will depend primarily on future developments on the labour market which has so far remained stable. However, if the employment situation worsens considerably in the coming months and unemployment increases once more, this would put additional strain on the income indicator and the good levels currently being enjoyed would not be sustainable."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said this was a "welcome rebound" in the consumer sentiment index, but more is needed to reverse the gentle downtrend since the beginning of the year.
"In addition, the headline index is not a good indicator for neither retail sales nor consumers’ spending," he said.
"Consumers in Germany are now caught between the reality of a still-solid labour market overall, and decent real wage growth, and a full-blown recession in manufacturing, which is now affecting labour market conditions in this key sector. Employment intake is slowing, marginal workers are being laid off, and work hours are being reduced all factors that should, in time, hit sentiment."