November 26, 2019 / 7:00 AM / 3 months ago

German shoppers willing to splash out in holiday season - GfK

    BERLIN, Nov 26 (Reuters) - The mood among German consumers
rose unexpectedly heading into December, a survey showed on
Tuesday, suggesting that household spending will continue to
prop up growth in Europe's biggest economy at the end of the
    Record-high employment, inflation-busting pay hikes and
historically low borrowing costs have turned household spending
into a steady and reliable driver of growth in Germany, helping
to cushion its export-dependent economy from trade problems.
    The consumer sentiment indicator, published by the
Nuremberg-based GfK institute and based on a survey of around
2,000 Germans, improved to 9.7 from 9.6 in November. A Reuters
poll of analysts had predicted a stable reading.
    GfK said a sub-index measuring economic expectations jumped
as Germans became more optimistic about the growth outlook due
to "tentative signs of easing" in the trade dispute between the
United States and China.
    Consumers' income expectations also increased thanks to the
robust labour market, rising wages and moderate inflation, GfK
    "Consumers are therefore optimistic about the upcoming
holiday season, one of the busiest times of the year for a
number of retail industries such as consumer electronics and
toys," GfK researcher Rolf Buerkl said.
    The German economy avoided slipping into recession in the
third quarter as consumers, state spending and exports drove a
0.1% quarterly expansion following a 0.2% contraction in the
previous three months, data showed on Friday.
    For the fourth quarter, the Ifo economic institute sees the
German economy on track to grow by 0.2% as its domestic strength
more than offsets a recession in the export-dependent
manufacturing sector.
                                  DEC 19    NOV 19     DEC 18
 Consumer climate                  9.7        9.6      10.2
 Consumer climate components       NOV 19   OCT 19     NOV 18
 - propensity to buy               50.0      51.7      55.6
 - income expectations             45.5      39.0      48.3
 - economic expectations           1.7       -13.8     14.8
    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 in
comparison 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
    The "willingness to buy" indicator 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 the development of household finances in the coming 12
    The additional business cycle expectations index reflects
the assessment of those questioned of the general economic
situation in the next 12 months.

 (Reporting by Michael Nienaber
Editing by Paul Carrel)
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