German Gfk consumer climate dropped to 10.8 in May, down 0.1 from 10.9, met expectations.

Quote from the release:

“The increasingly insecure state of geopolitics now also seems to be influencing the mood of consumers. There is a tangible drop in economic expectations in April, while income expectations fell only slightly by comparison. In contrast, propensity to buy is still at a very high level.”

“The escalation of the Syrian crisis and the protectionist trade policies of the United States are worrying consumers and could now also affect Germany’s previously excellent economic prospects.”

“Further escalation of these conflicts would also have a long-term adverse effect on the consumer climate. Above all, increasing protectionism in international trade would hit Germany, as an export nation, resulting in employees fearing they may lose their jobs and again being more reluctant to buy. In this case, the consumer forecast would certainly be untenable.

Full relesae here.

According to the Bundesbank’s monthly report, German economy is “gradually recovery from the severe slump as a result of the coronavirus pandemic”. After the massive decline in GDP in springs experts expect a “strong countermovement” in Q3. But both industry and service sector would fall well below the pre-crisis level in the summer.

Industrial productions continued its recovery at a slower pace in July Bundesbank assumes that “recovery will continue in the further course of the year, albeit at a slower pace”. Also, expectations regarding export are “still cautious”.

It also noted that unemployment stood steady at 6.4% for the three month in a row. “The recovery tendencies in employment and unemployment could continue”

Full release here.