German consumer confidence is set to weaken for a third straight month in November owing to deterioration in households’ economic expectations and willingness to make big purchases, results of the monthly survey by the GfK showed Wednesday.
The forward-looking GfK consumer confidence index for November dropped to 9.4 from 9.6 in October. The score was in line with economists’ expectations. The latest reading was the lowest since February.
The results are from the “GfK Consumer Climate MAXX survey,” which is based on approximately 2,000 consumer interviews conducted each month on behalf of the European Commission.
The economic expectations index of the survey fell for a fifth time in a row, tumbling to -2.9 points in October from 6.4 in September. Consumer expectations slid to below zero for the first time since May 2013 and moved beneath their long-term average, the market research group said.
The weakness in economic expectations goes hand in hand with the concern felt by many German citizens that the situation in the labor market will worsen in the coming months, the GfK said. Around 44 percent of respondents believed unemployment will rise or rise significantly over the next few months versus 22 percent in July.
Further, about 70 percent of respondents who believe that unemployment will increase over the next few months cited the refugee crisis as the primary cause for their concerns. On the other hand, German consumers do not fear that the Volkswagen pollution-cheating scandal currently presents much of a risk for the labor market as just 8 percent cited this as a reason for their gloomy view on employment.
The income expectations index held steady at 47.7 in October, while the willingness-to-buy measure fell t 45.9 from 50.4.
GfK forecast private consumption growth to improve to 1.5 percent this year from 1.2 percent in 2014.
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