April 26, 2018 / 6:03 AM / a year ago

German consumer morale slips heading into May

    BERLIN, April 26 (Reuters) - The mood among German consumers
fell heading into May, a survey showed on Thursday, amid fears
that a possible confrontation between the West and Russia in
Syria and protectionist U.S. trade policies could hurt the
    The consumer sentiment indicator, published by the GfK
institute and based on a survey of around 2,000 Germans, fell to
10.8 going into May from 10.9 a month earlier. The reading was
in line with forecasts from a Reuters poll.
    "The escalation of the Syrian crisis and the protectionist
trade policies of the United States are worrying consumers and
could now also affect Germany's previously excellent economic
prospects," GfK researcher Rolf Buerkl said in a statement.
    "This development has also been exacerbated by major
fluctuations in the stock markets, which also indicate an
emerging insecurity among market participants and more turbulent
times ahead," Buerkl said.
    Both economic and income expectations fell, the survey
showed. But propensity to buy rose to a three-month high, good
news for an economy that has depended on consumption for growth.
    The economy has grown for the past nine years. Low interest
rates, record-high employment and rising real wages are all
supporting consumption.
    "Consumer mood is still very high. Consumers are still
willing to open their wallets and spend. Firstly, there is
little fear of job losses due to the excellent employment
situation," Buerkl said.
    "This supports planning security, which should primarily
lead to greater spending, particularly because the period of low
interest rates in the euro area will continue, making saving an
unattractive alternative. Moderate price development will also
support consumer mood."
    The dip in the mood among consumers is shared by other
sentiment surveys. Both the Ifo institute's business morale
indicator and the ZEW investor sentiment survey fell this month
on weaker economic data in the first quarter.          
                                   MAY 18  APRIL 18  MAY 17
 Consumer climate                  10.8      10.9     10.2
 Consumer climate components     APRIL 18  MARCH 18  APRIL
 - willingness to buy              60.0      59.1     60.2
 - income expectations             53.5      54.9     57.5
 - business cycle expectations     37.4      45.9     30.3
    NOTE - The consumer climate indicator forecasts the
development of real private consumption in the following month.
    An indicator reading above zero signals year-on-year growth
in private consumption. A value below zero indicates a drop 
compared with the same period a year ago.
    According to GfK, a one-point change in the indicator
corresponds to a year-on-year change of 0.1 percent in private
    "Willingness to buy" represents the balance between 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
about household finances in the coming 12 months.
    The additional business cycle expectations index reflects
the assessment of those questioned about the general economic
situation in the next 12 months.

 (Reporting by Joseph Nasr, editing by Larry King)
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