German Consumer Sentiment to Tumble in September, Impacting Economic Recovery: GfK-NIM Survey
German consumer sentiment is set to tumble going into September as slightly rising unemployment, job cuts, and insolvencies drive down income expectations, impacting hopes for a stable economic recovery, according to a survey by GfK and NIM.
The consumer sentiment index fell to -22.0 points in September from a slightly revised -18.6 the month prior, below forecasts.
A drop in income expectations led to the decline in overall sentiment, as an increase in purchasing power was not enough to offset rising labor market uncertainty.
This setback comes after a brief recovery in August, attributed to the European Championship, according to NIM consumer analyst Rolf Buerkl.
Rising unemployment, company insolvencies, and job cuts at firms like Deutsche Bahn, Bayer, and ZF Friedrichshafen are contributing to the economic challenges in Germany.
According to the survey, the consumer climate indicator forecasts the progress of real private consumption in the following month, with a reading above zero signaling year-on-year growth.
Overall, the data reflects a concerning trend for the German economy, as consumer sentiment takes a hit amidst ongoing challenges.