German consumer confidence falls as income expectations tank

(Sharecast News) - German consumer sentiment has declined for the third straight month, according to a closely followed survey on Wednesday, as income expectations dropped on the back of worries about job security. The forward-looking GfK consumer climate index fell to -23.6 for September, from a revised -21.7 for August, marking its lowest level since April and missing the -21.5 consensus forecast.

The income indicator fell sharply after five consecutive increases, slipping 11.1 points to 4.1, as concerns about job losses and uncertainty about inflation continued to dampen the outlook.

"The geopolitical situation and the US government's tariff policy are fuelling fears that energy prices, among other things, could rise again. Accordingly, German consumers' inflation expectations rose for the second month in a row in August," GfK said in its report.

Weaker income prospects meant that consumer willingness to buy remained at "rock bottom", GfK said, with the indicator falling 0.9 points to -10.1 - a seven-month low. The propensity to save gauge fell 0.6 points to 15.8.

"With the third consecutive decline, consumer sentiment is now definitely in the summer slump," said Rolf Bürkl, head of consumer climate at the Nuremberg Institute for Market Decisions, the founder of GfK.

"Growing fear of job losses is causing many consumers to remain cautious about making major purchases. This further dampens hopes for a robust recovery in consumer sentiment before the end of the year," Bürkl said.