German consumers downbeat on global recession worries: GfK
BERLIN (Reuters) - German consumer sentiment fell slightly going into September, a survey showed on Thursday, hitting a 10-month low as the euro zone debt crisis and fears of another recession in Europe and the United States weighed on consumer expectations.
The figure added to signs that growth in Europe's largest economy is moderating. The GfK survey's sub-index tracking consumer expectations for the economy plummeted to 13.4 from 44.6 in the previous month. However, a sub-index tracking consumers' willingness to buy rose marginally on the back of a strong labor market.
The forward-looking index of consumer morale by market research group GfK fell for a third month in a row to 5.2 going into September from a downwardly revised 5.3 in the prior month. The August reading had been originally reported as 5.4.
"The worsening of the debt crisis as well as the sharp tumble in stock markets worldwide is only impacting consumer morale slightly at the moment," GfK said in a statement.
"The extremely positive domestic framework, such as falling unemployment and rising incomes, are compensating for these negative factors."
The September figure matched a Reuters poll forecast.
Germany's economy has been a star performer in the industrialized world since the end of the 2008 financial crisis and has supported euro zone growth.
The unemployment rate has fallen to its lowest since German unification two decades ago, at 7 percent, boosting usually cautious consumer sentiment.
"The extremely positive signals from the labor market with the prospect of rising income is the considerable driver for Germans' consumer mood at the moment," GfK said, noting the euro zone debt crisis was also encouraging Germans to spend rather than save.
"Many citizens are worried about the stability of their currency and therefore invest their money in purchases that will keep their value rather than saving it up for a rainy day," GfK said.
Yet recent data and forward-looking indicators have raised questions over how much longer Germany can sustain its economic growth in the light of global developments.
The economy grew just 0.1 percent in the second quarter on a quarterly basis after a 1.3 percent expansion in the first quarter.
Business morale fell in August at its fastest rate since the aftermath of the Lehman Brothers collapse in late 2008, data showed on Wednesday. That suggested the slowdown could be more precipitous than many economists had originally thought.
"Citizens fear that the Germany economy will be infected by the worldwide weakness if the outlook for exports darkens considerably," GfK said.
"In addition to falling economic optimism, citizens fear that they will be asked to cough up ever more money in the framework of the solution to the debt crisis," it added.
As the euro zone's biggest economy, Germany foots more than a quarter of the bloc's bill for bailouts. As further aid schemes are drawn up and as the German economy seems to be slowing, more Germans are worried about financing rescues.
Earlier this week, a purchasing managers' survey showed new orders in the German services sector dropped for the first time since June 2010. Service providers were downbeat about the outlook for the year ahead for the first time since April 2009, Markit's PMI survey showed.
(Editing by Susan Fenton)
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