BERLIN Nov 26 German consumer morale dipped
slightly going into December amid concerns over the euro zone
crisis and global growth but still-solid domestic demand should
help Europe's largest economy avert recession, market research
group GfK said on Monday.
The forward-looking consumer sentiment indicator, based on a
survey of around 2,000 Germans, eased to 5.9 heading into
December from a downwardly revised 6.1 in November, the same
level as in October.
December's reading was below expectations in a Reuters poll
of 24 economists for a level of 6.2.
The GfK data also showed German consumers' readiness to make
purchases and their expectations for future earnings declined in
November from the previous month but were still at historically
high levels, underpinned by Germany's robust labour market.
"(December's figure) brings to a halt for now the rising
trend seen in consumer sentiment. Despite the light losses,
however, the level remains satisfactory," GfK said.
"Private consumption will thus perform its appointed role of
providing important support for the German economy."
Economists have increasingly pinned hopes on private
consumption, which makes up around 60 percent of German gross
domestic product (GDP), as exports to key markets in the euro
zone have flagged in the face of the region's debt crisis.
Low interest rates are also encouraging Germans,
traditionally a nation of savers, to splash their cash. The
index tracking their willingness to buy stood at 29.4 in
November, down from 33.9 in October but still firm.
The income expectations index was 17.8 in November, down
from 29.9 in October, but still well above the historic average.
NO RECESSION SEEN
"Although the signals from the economy are not very
encouraging for now, the dangers of recession in the view of
Germans are not increasing," GfK said in its statement.
Recent data confirmed that Germany's economy slowed to 0.2
percent in the third quarter from 0.3 percent in the previous
three months. Economists expect it to contract in the fourth
quarter but to regain momentum in early 2013.
The Ifo think tank reinforced that optimism last week with
an unexpectedly upbeat reading of business morale for November,
based on improved prospects for German exports outside the euro
zone and expectations of strong Christmas sales.
The Ifo monthly report contrasted sharply with other recent
data that had shown the private sector shrinking, industrial
orders and output down and exports falling at the fastest pace
since late last year.
Unemployment rose for a seventh month in October but remains
near its lowest level since German reunification more than two
decades ago, providing key support for consumer confidence.
"People are not afraid of losing their jobs and so are more
willing to make bigger, more expensive purchases," GfK said.
"Germans still expect their incomes to rise in the future.
As inflation in coming months will not accelerate significantly,
a considerable portion of employees will get real wage
increases," GfK added.
(Reporting by Gareth Jones, editing by Noah Barkin)