Jobs worries weigh on German consumer sentiment in September, GfK By Reuters shows

BERLIN (Reuters) – German consumer sentiment is set to fall in September as slightly rising unemployment, job cuts and insolvency dampen earnings expectations, denting hopes of a steady economic recovery, a survey showed on Tuesday.

The consumer sentiment index, published by GfK and the Nuremberg Institute for Market Decisions (NIM), fell to -22.0 points in September, from a slightly revised -18.6 in the previous month and below the forecast of -18 ,2.

A drop in income expectations weighed on overall sentiment, falling 3.5 points from 19.7, as an increase in purchasing power felt by many households was not enough to offset growing uncertainty in the labor market.

The recovery seen in August was only a problem because of the European Championship, said NIM consumer analyst Rolf Buerkl.

“Slight rising unemployment figures, an increase in corporate insolvencies and downsizing plans at various companies in Germany have a number of employees worried about their jobs,” Buerkl said, pushing hopes for a sustainable economic recovery, driven by private consumption.

Unemployment rose more strongly than usual at the start of the summer holiday, while economic institutes predicted a rise in corporate insolvencies. There have also been a number of recent job cuts announced at firms such as Deutsche Bahn, Bayer (OTC:) and ZF Friedrichshafen.

SEP 2024 AUG 2024 SEP 2023

Consumption climate -22.0 -18.6 -25.6

Consumer Climate Components AUG 2024 JUL 2024 AUG 2023

– willingness to buy -10.9 -8.4 -17.0

– income expectations 3.5 19.7 -11.5

– business cycle expectations 2.0 9.8 -6.2

NOTE – The survey period was from August 1-12, 2024.

The consumer climate indicator forecasts the progress of real private consumption in the coming month.

An indicator showing above zero signals annual growth in private consumption. A value below zero indicates a decrease compared to the same period a year earlier.

According to GfK, a one-point change in the indicator corresponds to an annual variation of 0.1% in private consumption.

The “willingness to buy” indicator is the balance of positive and negative responses to the question: “Do you think now is a good time to buy major items?”

The income expectations sub-index reflects expectations regarding the development of household finances over the next 12 months.

The additional index of business cycle expectations reflects respondents’ assessment of the general economic situation over the next 12 months.