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Consumer Confidence
Countries measure the mood of their consumers by surveying consumer attitudes regarding present economic conditions each month. Consumer spending usually makes up two-thirds of GDP in a developed economy, and therefore is important to monitor. Consumer confidence also affects stock and bond markets, and can give insight into consumers reactions to any economic shocks. The general method in scoring the confidence level is through household surveys conducted monthly. Some use preliminary estimates which surveys fewer households at the beginning of the month, and a final survey that encompasses a larger sample pool towards the end of the month.

Main Indicator: GfK Consumer Confidence

Most Recent Release

April
28th, 2008
Actual Forecast Previous Revised Form
5.9 4.6 4.8 4.6

For May
Provided by: GfK Group
Official Release: News Release
Official Release: PDF

The mood among consumers rose during April, surprising expectations on the upside. The index increased to a 7-month high on the back of rising incomes which encouraged spending, despite faster inflation and an apparent slowdown in the overall economy.

From the Release:

"The mood among German consumers markedly improved in April. The economic outlook indicator, income expectations and the propensity to buy all climbed significantly. As a result, the consumer climate indicator for May is forecasting a value of 5.9 points after a revised 4.8 points in April.

It is striking that all three indicators have gained significantly this month. Despite the persistent turmoil on the international financial markets and the high food and energy prices, German consumers appear to have regained their confidence once more. The upswing on the job market and recent wage agreements both contribute to expectations relating to the economy in general and personal financial situations being assessed more positively. This shows that conditions have improved so that the economic recovery originally forecast to take place at the beginning of the year, although delayed, is now imminent."

Table of Past Data

4/266/287/274/2611/2812/201/252/273/274/28
Actual5.57.88.65.54.34.54.54.54.65.9
Forecast5.16.97.84.84.54.14.34.44.44.6
Previous5.16.87.84.44.94.44.54.54.54.8
Revised FromN/AN/AN/AN/AN/A4.3N/AN/AN/A4.6

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Past Releases

March
27th, 2008
Actual Forecast Previous Revised Form
4.6 4.4 4.5 N/A

For March
Provided by: GfK Group
Official Release: News Release

Pre-Release:
The last 3 months (Jan, Feb, Mar) have seen consumer confidence holding steady at 4.5 after the indicator recovered from falling to 4.3 in December. Forecast are for a small decline in April's reading compared to the pace set in the 1st quarter. Germany has been relatively strong out of the euro-zone economies and hopefully consumer sentiment will remain stable.

Post Release:
The indicator surprised on the upside, increasing to 4.6. The recent trend has seen Germany's fundamental data outpacing expectations. Consumes were placated by favorable results in recent collective wage agreements. The propensity to buy increased, though worries over uncertainty in financial markets limited any gains in the economic expectations sub-gauge.

The EUR/USD had been trending down prior to the release, after the pair set a high yesterday at 1.5850. The release didn't have a major impact and the pair began consolidating in the several hours following it.

From the Release:

"The mood among German consumers has slightly improved in March. While the economic outlook indicator increased only modestly, income expectations and the propensity to buy climbed significantly. As a result, the consumer climate indicator for April has a value of 4.6 points after 4.5 points in March. However, this tentative recovery cannot obscure the fact that achieving the prior consumption forecast of 1.5% will be difficult in the face of continued high rates of inflation.

Nevertheless, the positive trend in the labor market coupled with considerable increases in collective wage agreements boosted income expectations and the propensity to buy in March. The ongoing mortgage crisis and the risk of a recession in the USA are likely to be the main reasons for the economic expectations indicator lagging slightly behind the other two indicators, with a modest increase only."

February
27th, 2008
Actual Forecast Previous Revised Form
4.5 4.4 4.5 N/A

For March
Provided by: GfK Group

Consumer confidence in Germany remained steady during February and pointed to confidence remaining stable during March. The news combined with yesterday's business confidence to paint a picture in which the largest economy in the euro-zone is weathering the slowdown in the US. In the couple of hours following the release, the EUR/USD set a new session high, a new record, near 1.5089.

"On the whole, the sentiment among German consumers was stable in February. The income expectations indicator rose slightly on the back of wage rises anticipated to be quite significant, while the propensity to buy and economic expectations indicators recorded renewed falls. The overall consumer climate indicator is forecasting a value of 4.5 points for March, unchanged on the first two months of the year.

At the start of this year, consumers are still finding it difficult to identify a clear direction for general economic trends and their personal financial situation. The repercussions of the mortgage crisis in the USA are just as evident as the uncertainty prompted by unstable developments in the US economy, the current high rate of inflation and volatility in the stock markets. Nevertheless, consumers are still receiving positive signals. Development in Germany’s labor market seems stable, the prospects for generous collective wage agreement settlements are good and the German economy continues to enjoy an upswing."
January
25th, 2008
Actual Forecast Previous Revised Form
4.5 4.3 4.5 N/A
For February.
December
20th, 2007
Actual Forecast Previous Revised Form
4.5 4.1 4.4 4.3
For January
Release from GfK Press Release Dec 20, 2007

Propensity to buy picked up at year end after recent months of reluctance. The sub-index gained 11.1 in December to offset the previous month's loss of 8.9. Income expectations and economic projections both declined.
November
28th, 2007
Actual Forecast Previous Revised Form
4.3 4.5 4.9 N/A
For December.

The forward looking German consumer confidence shows a decline for December, as high food and energy prices, and financial market turbulence are making German consumers more pessimistic. It is the 4th straight decline in the indicator.
April
26th, 2007
Actual Forecast Previous Revised Form
5.5 4.8 4.4 N/A
GfK's Consumer Expectation Index rose also to an all time high of 61 from 53.1 last month.
July
27th, 2006
Actual Forecast Previous Revised Form
8.6 7.8 7.8 N/A
The German GfK market research institute’s consumer climate index forecasts an increase to 8.6 points in August from an upwardly revised 8.0 points in July as consumer sentiment continued to improve. These forecasts comes as consumer sentiment continued to pick up in July, driven by an increased willingness to buy big-ticket items ahead of the 3% point VAT hike in January next year.
June
28th, 2006
Actual Forecast Previous Revised Form
7.8 6.9 6.8 N/A
The consumer mood in Germany continued to improve in June. This was primarily attributable to the further slight increase in the propensity of consumers to make major purchases in the near future. For the second consecutive month, the indicator climbed to a record high. Following a revised 7.0 points in June, the forecast for the consumer climate indicator in July is 7.8 points. The survey aims at forecasting household spending one month ahead.
April
26th, 2006
Actual Forecast Previous Revised Form
5.5 5.1 5.1 N/A

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