BERLIN (Reuters) – The mood among German shoppers improved slightly heading into October as shoppers’ incomes and economic expectations both rose, a survey showed on Thursday, suggesting that consumers will keep feeding the growth of Europe’s largest economy.
Household spending has become the main source of expansion in Europe’s biggest economy in recent years, backed by record-high employment, increased job security, above-inflation pay hikes and low borrowing costs.
The Nuremberg-based GfK institute said its consumer sentiment indicator, based on a survey of around 2,000 Germans, rose to 10.6 points going into October from 10.5 points the previous month. That compared with a Reuters consensus forecast for the index to stay unchanged at 10.5 points.
“Despite political turbulence, economic and income optimism are on the up,” Rolf Buerkl, a researcher for GfK, said in a statement. “Private-sector spending will thus prove itself to be an important pillar of Germany’s economic growth.”
GfK’s subindex measuring propensity to buy fell 2.3 points to 52.9. The income expectations index rose 5.3 points on the month to 57.9, the highest in a year, propelled by a stable job market and strong demand for workers.
The sub-index measuring economic expectations rose 4.9 points to 27.1.
“Neither the trade dispute between the EU and the United States nor the threat of a hard Brexit seems to be restricting economic optimism long-term,” Buerkl said.
The GfK survey was conducted from Aug. 31 to Sept. 14, as concern mounted in Germany about progress of talks over a deal on Britain’s departure from the European Union.