(Reuters) – German consumer sentiment is expected to weaken in September as unemployment rises as layoffs and business bankruptcies reduce income expectations and dampen hopes for a stable recovery, a survey showed on Tuesday.
The consumer confidence index, published by the GfK institute and the Nuremberg Institute for Market Decisions (NIM), deteriorated to -22.0 points in September, compared to -18.6 (revised) in August and a consensus of -18.2.
The collapse in income expectations pushed sentiment down from 19.7 to 3.5 points, as the increase in purchasing power felt by many households was not enough to offset growing uncertainty about the jobs market.
The sharp recovery seen in August was just a parenthesis due to the European football championship held in Germany this summer, said Rolf Buerkl, an analyst at NIM.
“The slightly rising unemployment figures, the increase in business bankruptcies and the plans to cut staff in various companies in Germany have some employees worried about their jobs,” he said, dismissing hopes of a sustainable economic recovery driven by private consumption.
Unemployment rose more sharply than usual at the start of the summer holidays, while economic institutes predicted an increase in business bankruptcies.
A series of job cuts have also been announced recently at companies including Deutsche Bahn, Bayer and ZF Friedrichshafen.
(Written by Diana Mandiá, with Miranda Murray, edited by Augustin Turpin)
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