German consumer morale eases from six-year high: GfK
BERLIN (Reuters) - German consumer confidence eased slightly heading into September, albeit remaining close to its highest level in nearly six years, as shoppers worried about creeping inflation.
GfK market research group said on Wednesday its forward-looking sentiment indicator, based on a survey of around 2,000 people, fell to 6.9 going in to September from 7.0 in the previous month, its highest level since before the global financial crisis.
That undercut the lowest forecast in a Reuters poll, for the index to hold steady at 7.0. A run of strong data from Europe's largest economy over the past month had raised expectations and the mid-range forecast was for a rise to 7.1.
"The upwards trend in the consumer climate since February has halted for now," GfK wrote in a statement.
"However this does not mean a turnaround in the overall trend and the start of a slide."
A sub-index tracking consumers' income expectations eased, albeit from a high level thanks to low unemployment and strong wage increases this year.
"A possible reason for this fall is that consumers are slightly less optimistic about the economy," GfK said. "Expectations of price rises will likely also have played a role ... Consumers fear their purchasing power will be weaker."
Higher food costs drove a 1.9 percent rise in annual inflation in July, the fastest rate in 2013.
Consumers were less optimistic about the economic outlook despite data last week showing the economy grew at the fastest rate in more than a year in the second quarter.
"Consumers clearly think the German economy is in a recovery but this will be rather moderate in the coming months and smaller setbacks cannot be excluded," GfK wrote.
A bastion of strength in the early stages of the euro zone crisis, the German economy shrank at the end of last year and narrowly avoided recession early in 2013 before bouncing back again.
Many economists now believe that the German economy will expand at a faster rate than the government's current forecast of 0.5 percent growth this year, but expect a slight slowdown from the pace in the second quarter.
A strong economy will likely help Chancellor Angela Merkel in her bid for a third term in federal elections on September 22.
GfK reiterated its forecast for private consumption to grow by around 1 percent in real terms in 2013, offsetting likely weaker exports, particularly to other euro zone countries and to China.
Consumers in Germany, traditionally a nation of savers, became more willing to spend in August than at any other point since December 2006, in particular due to historically low interest rates and rising inflation.
But they were also worried about the risk of inflation eroding their purchasing power and slowing momentum in Europe's largest economy.
The research group said consumers were more keen to make big financial investments such as in real estate, which was reflected in the data for second quarter German economic growth showing a flurry in construction.
German authorities handed out 10.8 percent more home building permits in the first half of 2013 than in same period a year ago, data showed earlier this month, underlining the strength of the real estate market.
(Editing by Ruth Pitchford)
- Obama makes rare campaign trail appearance, people leave early
- Obama makes rare campaign trail appearance, some leave early
- Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders |
- Nigeria declared Ebola-free, holds lessons for others |
- Former 'American Idol' contestant Joanne Borgella dies at 32