German Consumer Confidence Holds Steady for a Third Month
German GfK consumer confidence remained steady at 2.5, with April revised up from 2.4. The breakdown, which is only available until April showed the reading for the willingness to buy falling slightly to 12.4 from 13.9, despite improvements in the readings for income expectgations and business cycle expectations. However, the latter remained firmly in negative territory, indicating that pessimists far outnumber optimists. The reading for income expectations improved to -8.0 from -11.4 and the reading for business cycle expectations improved to -31.2 from -32.8. Data are encouraging so far, but with unemployment set to rise sharply this year, there is a severe risk of a new set back in confidence.
Meanwhile, German March import prices dropped 0.4% m/m and 7.1% y/y, lower than expecte and despite rising energy prices that month. Indeed excluding energy prices would have risen 0.8% m/m. However, the annual rate remains impacted by lower energy prices, with prices excluding energy down merely 1.8% y/y. Import prices are coming down fast, which will continue to push down prices consumer prices.