A new survey has shown that German consumer confidence is holding up in face of the euro zone debt crisis and looming recession fears because households believe their income is not going to be affected.
GfK released its latest index of household confidence, putting the figure for October at 5.2 points, unchanged from the previous month. "This means, at least for the time being, that the consumer climate is defying the deepening debt crisis and the threat it could spill over from the financial markets to the real economy," GfK said.
The headline consumer confidence index is based on responses from around 2,000 households with regard to their expectations about pay and the economy as a whole in the coming months, as well as their willingness to spend money. While two sub-indices for economic expectations and willingness to spend fell compared with the previous month, income expectations have actually risen thanks to the high and stable level of employment in Germany, GfK explained. Another leading German indicator, the Ifo business climate index, fell to its lowest level in more than a year yesterday although it was still better than expected.