German Shoppers Willing To Splash Out In Holiday Season: GfK
The mood among German consumers rose unexpectedly heading into December, a survey showed on Tuesday, suggesting that household spending will continue to prop up growth in Europe's biggest economy at the end of the year.
Record-high employment, inflation-busting pay hikes and historically low borrowing costs have turned household spending into a steady and reliable driver of growth in Germany, helping to cushion its export-dependent economy from trade problems.
The consumer sentiment indicator, published by the Nuremberg-based GfK institute and based on a survey of around 2,000 Germans, improved to 9.7 from 9.6 in November. A Reuters poll of analysts had predicted a stable reading.
GfK said a sub-index measuring economic expectations jumped as Germans became more optimistic about the growth outlook due to "tentative signs of easing" in the trade dispute between the United States and China.
Consumers' income expectations also increased thanks to the robust labour market, rising wages and moderate inflation, GfK added.
"Consumers are therefore optimistic about the upcoming holiday season, one of the busiest times of the year for a number of retail industries such as consumer electronics and toys," GfK researcher Rolf Buerkl said.
The German economy avoided slipping into recession in the third quarter as consumers, state spending and exports drove a 0.1% quarterly expansion following a 0.2% contraction in the previous three months, data showed on Friday.
For the fourth quarter, the Ifo economic institute sees the German economy on track to grow by 0.2% as its domestic strength more than offsets a recession in the export-dependent manufacturing sector.