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German Consumer Confidence Improves on Lower Gas Prices
Tuesday, 28 October 2008 07:20:51 GMT  |  DailyFX Research
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German November consumer confidence unexpectedly rose as oil prices decline. The GfK reading rose to 1.9 from 1.8. Expectations had been for a drop to around 1.5, and the rise was a surprise that is likely related to the drop in oil prices which is pushing down petrol and heating oil costs. The breakdown , which is only available until October, showed the reading for the economic outlook down at -27.5, from -15.7 in September and the reading for the willingness to buy dropped to -18.2 from -12.8. Despite this, the reading for income expectations increased to -12.9 from -14.1. For now lower oil prices may help to improve consumer confidence, but as growth slows down sharply the prospect of rising unemployment will have a negative effect. Daimler has already negotiated an extended Christmas break in some production plants as demand slows down, but this will only be a temporary solution and a wave of job cuts next year seems increasingly likely. Especially as emerging market demand is eroding fast.

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