German consumer sentiment is expected to decline for the third consecutive month in September, as growing fears of job losses and ongoing uncertainty about inflation weigh heavily on household confidence, according to a survey released Wednesday.
The consumer climate index, published by GfK and the Nuremberg Institute for Market Decisions (NIM), dropped to -23.6 points from a downwardly revised -21.7 in August. Analysts surveyed by Reuters had forecast a slightly stronger reading of -22.0.
The sharp decline in income expectations, which fell to their lowest level since March, was a key factor in the weaker outlook, NIM analyst Rolf Buerkl said. “Growing fears of job loss are causing many consumers to remain cautious, especially with big-ticket purchases,” he explained.
Uncertainty around inflation also dampened confidence, with consumers worried that geopolitical tensions and U.S. tariff policies could drive up energy prices. Buerkl added that hopes for a meaningful recovery in consumer sentiment this year remain limited.
Germany’s labor market is under increasing pressure, with unemployment creeping higher since 2022. The country is nearing 3 million unemployed for the first time in a decade. Analysts expect August jobless figures, due Friday, to show another 10,000 rise.
“The stagnating economy is making companies act cautiously when it comes to hiring and staffing plans,” said Klaus Wohlrabe of the Ifo Institute. Europe’s largest economy contracted 0.3% in the second quarter, casting further doubt on near-term recovery prospects.
Both household economic expectations and willingness to buy fell to their lowest levels since February, the survey showed. Germany’s retail association HDE urged Chancellor Friedrich Merz to boost growth and provide targeted relief to low- and middle-income households, stressing that domestic measures could be more effective than relying on uncertain global conditions.
