German consumer morale reaches 16-year high

Already-buoyant German consumer sentiment continued to rise further heading into August, the GfK market research group said today.

The GfK consumer sentiment indicator, based on a survey of 2,000 Germans, rose to 10.8 going into August from 10.6 recorded in July.

The 10.8 reading was the highest level since 11.0 in October 2001.

A Reuters poll had forecast an unchanged reading of 10.6 from last month.

“In the opinion of consumers, the German economy is now firing on all cylinders,” Rolf Buerkl, a researcher for Nuremberg-based GfK, said in a statement.

He noted that economic expectations and income expectations continued to rise.

“Consumers are expecting that the domestic economy can even pick it up a notch over the course of the remainder of the year.”

Germany’s robust labour market, with unemployment reaching new lows each month, continues to fuel consumption and growth.

Mr Buerkl noted that consumers appear to be undisturbed by global risks such as the start of Brexit talks, the threat of US tariffs on imports, and the increasingly difficult relations between Germany and Turkey.

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