Consumer sentiment has brightened further in Germany amid rising real incomes and secure jobs. A respective index by GfK research group has jumped to its highest level in more than five years.
GfK's forward-looking household confidence index rose 0.3 points, from 6.5 points recorded for June to 6.8 points for July, the German consumer research group said Wednesday.
The barometer had climbed to its highest reading since September 2007, GfK added, as consumers' optimism remained unbroken.
“Stable employment and favorable wage deals mean that already high income expectations are still rising, having a positive effect on economic expectations,” the GfK report said.
The GfK consumer sentiment index is compiled every month based on responses from about 2,000 households regarding their expectations about pay and the economy as a whole in the coming month. In addition, consumer's willingness to spend is gauged.
For July, the sub-indicator for income expectations grew significantly, while the rise in outlook for the economy was only modest. Moreover, Germans appeared slightly less willing to make big purchases, compared with last month's survey, although their willingness to spend remained at a very good level, GfK reported.
In general, Germans were less inclined to save their money than spending it, the research group said, a fact which had led to strong private consumption becoming a main pillar of German economic growth in recent months.
On Monday, Ifo research group's business climate index also rose slightly, signaling a brighter mood also among German businesses.
uhe/hc (AFP, dpa, AP, Reuters)