German consumer morale is set to weaken in September as the weakening economy, fears of job cuts and rising insolvencies weighed on both income and economic expectations.
The forward-looking consumer sentiment index fell to -22.0 from -18.6 in August, the survey published jointly by the market research group GfK and the Nuremberg Institute for Market Decisions, or NIM, revealed Tuesday.
The euphoria that the European Football Championship triggered in Germany was only a brief flare-up and disappeared after the end of the tournament, said NIM consumer expert Rolf Burkl.
Burkl noted that slightly rising unemployment, an increase in corporate bankruptcies and plans of various companies to reduce staff are causing a number of employees to worry about their jobs.
The income expectations index declined 16.2 points to 3.5 in August. A major decline in income expectations was last measured almost two years ago, in September 2022.
The survey showed that there was more uncertainty regarding the purchasing power of households and concerns about job security have increased among a number of employees.
The sharp decline in income expectations impacted the propensity to buy. The corresponding index dropped 2.5 points to -10.9 in August.
The economic expectations index declined 7.8 points to 2.0 in August. The weakness in the economy, job cuts and rising insolvencies and the increase in the risk of recession are unsettling consumers and pessimism over the coming twelve months.
Official data today confirmed that the German economy shrank 0.1 percent in the second quarter due to weak household consumption and investment.