A leading German market research group has said German consumer confidence has remained unfazed by the terror attacks in Paris and the rising likelihood of such attacks in Germany. A robust labor market is key.
Germany’s GfK market researchers said Tuesday their monthly barometer gauging consumer confidence in Europe’s powerhouse was pointing upwards again after a long period of decline.
The group’s forward-looking index for January showed a 0.1-percent increase over December to reach 9.4 points.
The slight improvement came after four consecutive monthly drops. GfK researchers said the January increase in consumer confidence had not been anticipated as there had been fears the November terror attacks in Paris might severely impact the mood among shoppers in Germany.
“Now it’s obvious that the attacks in Paris and the rising danger of such attacks happening in Germany have not changed consumers’ general optimism about economic developments in the country,” GfK expert Rolf Bürkl said in a statement.
No big worries
He argued that strong consumer confidence was predominantly based on a continuously robust labor market with record-low unemployment, making people believe that they were unlikely to lose their jobs in the near future.
Bürkl also mentioned the prospects of further wage hikes in many sectors of the economy, giving consumers more money to spend as low inflation did its bit to boost people’s ability to spend more on goods and services.
“Energy prices have gone down considerably of late,” Bürkl said. “Low inflation means people’s real incomes are on the rise, and so is their willingness to spend more, also on big-ticket items.”
hg/nz (dpa, Reuters)