German Consumer Confidence Eases Again As Unemployment Fears Rise
27 November 2015 - 07:47PM
RTTF2
German consumer confidence is set to ease for a fourth straight
month in December, as the high influx of migrants raise fears of
unemployment and thus hurt economic and income expectations in the
biggest euro area economy.
The forward-looking consumer confidence index dropped to 9.3
from 9.4 in November, results of a monthly survey by GfK showed
Friday. Economists had expected a score of 9.2.
The GfK Consumer Climate MAXX survey is based on approximately
2,000 consumer interviews conducted each month on behalf of the
European Commission. The latest survey was concluded on November
13, when the Paris terrorist attacks occurred. Hence, any possible
impacts could not be taken into account in November's results, GfK
said.
"The consumer climate will be negatively affected if the events
in Paris and other potential attacks or attempted assaults cause a
sharp increase in consumer uncertainty or result in a significant
number of people avoiding crowded areas such as pedestrian zones",
the agency added.
The economic expectations index shed 2.4 points to -5.3 in
November. The latest decline was much lower than in the previous
two months when losses of more than 9 and 10 points were recorded,
GfK said. The indicator has consolidated its position in the
negative value range, remaining under its long-term average of 0
points, it added.
The survey also showed that just under 40 percent of German
citizens in November expected unemployment to rise in the near
future, while only 8 percent of respondents estimated that it would
fall.
Among those who expect an increase in joblessness, 69 percent
attributed it to the refugee crisis, and the steady high stream of
asylum seekers. This suggested a stabilization as the ratio was 70
percent in October.
Seasonal effects such as the weather, a perceived worsening in
the economic and employment situations, and the Volkswagen scandal
were minor reasons, the survey said.
"The economic mood among German citizens currently paints a much
more pessimistic view than the impression created by the actual
prevailing conditions and expert assessments of them," the GfK
said.
The income expectations indicator also eased in December,
shedding 3.3 points to reach 44.4. However, the level remains
particularly high in comparison to the economic expectations
indicator.
This implies that although consumers predict unemployment to
rise, they still do not believe that they themselves will be
affected by this, and are therefore not concerned about losing
their jobs, the market research group said. GfK has predicted
private consumption growth of 1.5 percent for 2015.
Meanwhile, the willingness-to-buy indicator of the survey rose
in November after declining for five months running. The measure
added three points to a total of 48.9 points, which the GfK called
an extremely high level that suggests that the propensity to
consume is still very pronounced despite the economic uncertainty.
Further, Destatis had reported that retail sales rose 2.7 percent
in the first nine months of the year.
The main drivers of this strong willingness to buy are the
favorable employment conditions and positive development in income
enjoyed by German households, GfK said. Further, low energy-price
driven low inflation is also underpinning the purchasing power of
consumers.
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