Consumer confidence in Germany continued to cool in August, with fresh data showing growing anxiety around job security and inflation.
According to the latest GfK Consumer Climate survey, the forward-looking indicator is forecast to fall by 1.9 points to -23.6 in September, from a revised -21.7 the previous month.
‘Summer slump’ hits consumer sentiment
"With the third consecutive decline, consumer sentiment is now definitely in the summer slump," said Rolf Bürkl, Head of Consumer Climate at the NIM.
He attributed the noticeable decline in income expectations to "growing concerns about job security."
The number of registered unemployed citizens recently increased and, although still just below three million in July, experts expect the threshold to be passed in August.
Employment pessimism has also grown significantly, with the indicator measuring expectations regarding unemployment reaching its highest level this year.
“Growing fear of job losses is causing many consumers to remain cautious about making major purchases,” Bürkl added.
“This further dampens hopes for a robust recovery in consumer sentiment before the end of the year.”
The increase in unemployment, a shaky beginning for the new federal government, and unclear US trade policy are currently failing to boost consumer confidence.
German shoppers keep wallets shut
The indicator measuring willingness to buy declined slightly, falling by 0.9 points to -10.1 in August. This is the weakest value since February 2025, when -11.1 points were recorded.
GfK noted that the combination of inflation fears and geopolitical uncertainty is “causing continued uncertainty among consumers”, leading to “a lack of planning security” and greater caution in making large purchases.
After five consecutive gains, income expectations recorded a sharp drop in August. The index fell by 11.1 points to 4.1, reaching its lowest level since March 2025, when it stood at -3.1.
In addition to growing concerns about job security, rising inflation expectations also contributed to the broader decline in sentiment.
Inflation fears are being fuelled by the geopolitical situation and the US government's tariff policy, raising concerns that energy prices could rise again. As a result, inflation expectations increased for the second month in a row.
If consumers were holding out hope for a rebound in Germany’s broader economic prospects, that optimism is fading.
The economic expectations indicator dropped for the second straight month, falling 10.1 points to -7.4. That’s its lowest level in six months.
Markets little changed
Despite the weaker German consumer sentiment data, European markets showed muted reaction on Wednesday morning.
The DAX slipped by around 0.1% to 24,128.81 points just after midday in Germany, following two straight sessions of losses.
Germany’s blue-chip index remains within striking distance of its all-time high of 24,639, reached last month.
In bonds, yields were little changed with 10-year Bunds steady at 2.70%, and two-year Schatz yields holding firm at 1.93%.
On currency markets, the euro dipped 0.5% to 1.1582 against the US dollar.
