12/19/2014
By Jennifer Coombs

Despite all of the gloom-and-doom economic headlines coming out of Germany over the past few months, there was a new spark of hope this week. Namely that despite the country’s slowing economic growth and industrial production their consumers don’t seem to be fazed. The forward looking reading (listed as January 2015 for the month of December) of Germany’s GfK consumer confidence index came in at 9.0 which is the highest level since December 2006. Economists are also starting to feel optimistic about consumer sentiment, as they set their estimate to 8.7 for the month. Within details of the report, consumers’ economic expectations and willingness to buy products improved over the month of December as lower energy prices gave households some flexibility to make larger purchases. However, income expectations worsened, which was explained by unstable international situations rather than domestic circumstances. Since Europeans conduct far more business with Russia, any geopolitical woes with the country also affects the economic moods of European nations. Nevertheless, as Europe’s largest economy, this news is relatively positive for the region as a whole. The German consumer is definitely emerging from a period of weakness, also evidenced by business confidence showing its second consecutive month of improvement.

Jennifer Coombs
Wall Street Strategies

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