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German consumer sentiment falls: GfK
AFP - Tuesday, October 27
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A woman shops at a supermarket in Duesseldorf, August 2009. The GfK economic research institute said that German consumer sentiment has fallen for the first time since September 2008 owing to rising petrol (gasoline) prices and forecasts for higher unemployment.
FRANKFURT (AFP) - – German consumer sentiment has fallen for the first time since September 2008 owing to rising petrol (gasoline) prices and forecasts for higher unemployment, the GfK economic research institute said on Monday.
GfK's consumer index, the result of a survey of around 2,000 individuals, "has experienced a light decline in autumn," the institute said, slipping to 4.0 points in October from 4.2 points in September.
A drop in a sub-index of consumer readiness to make large purchases was largely responsible for the decrease and reflected concerns that higher oil and energy prices would eat away at disposable income, GfK noted.
Fears of rising unemployment are also strong, even though a widely feared upturn in the number of jobless has failed to occur so far.
Leading German economic institutes have even reduced their forecast for the number of unemployed in 2010 to 4.1 million from estimates in April of just under 5.0 million.
Around 3.3 million people are now jobless in Europe's biggest economy.
At the same time, the end of Germany's cash-for-clunker's scheme that paid drivers 2,500 euros (3,750 dollars) to scrap an old car and buy a new one has reduced the number of people shopping for autos, GfK noted.
Whether or nor consumption contributes to a slow and fragile German recovery will depend on unemployment in the coming months, it said.
On Friday however, a key survey by the Ifo research institute showed that German business confidence had reached its highest level for more than a year.
But the creation of a new centre-right coalition government in Berlin and the especially fiscal support for taxpayers it has promised "was apparently not enough to life the mood of private households further," UniCredit economist Alexander Koch commented.
Meanwhile, "the outlook for substantial layoffs well into next year remains intact," he said.
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