Consumer sentiment in Germany continues to decline in August, according to newly released data. The GfK Consumer Climate index fell to -23.6 points, a decrease of 1.9 points from the revised figure of -21.7 in July. The decline is attributed to significant drops in both income expectations and optimism regarding the economic outlook.
A key driver of the negative trend is a substantial decrease in income expectations, while the propensity to save experienced only a marginal impact on the overall consumer climate. Experts at the Nuremberg Institute for Market Decisions (NIM), involved in the index calculation, note this marks the third consecutive monthly decline, placing consumer sentiment firmly in a summer lull.
Rising concerns about job security are believed to be a major contributing factor. Registered unemployment figures have increased, exceeding three million in August and consumer expectations regarding future employment levels have reached their lowest point this year. This growing fear of job loss is prompting consumers to remain cautious with major purchases, diminishing hopes for a substantial recovery in consumer spending in the near term.
Income expectations have suffered a particularly sharp reversal, decreasing by 11.1 points to reach 4.1 points-the lowest level since March 2025. Beyond job security concerns, ongoing uncertainty surrounding future price developments is also weighing on consumer confidence.
Geopolitical factors and the trade policies of the US government are fueling anxieties about potential increases in energy prices, leading to a second consecutive monthly rise in inflation expectations amongst German consumers.
While the propensity to purchase has also decreased, the decline is less pronounced than that of income expectations. The purchasing indicator fell by 0.9 points to -10.1 points, remaining at a low level not seen since February 2025.
Optimism regarding the overall economic outlook continues to wane. The economic indicator experienced a marked decline for the second consecutive month, falling by 7.4 points to 2.7 points-the lowest level in six months. As a result, expectations for a recovery in the German economy this year are diminishing from the consumer perspective.