Consumers are worried about autumn and winter

Shopping street in Dusseldorf

The trade in clothing has recovered significantly.

(Photo: IMAGO/Michael Gstettenbauer)

Dusseldorf Confidence among Germany’s consumers has fallen further. This is signaled by the HDE consumption barometer for September, which slipped by 0.28 points compared to the previous month and thus reached a new all-time low. The barometer is determined monthly by the Handelsblatt Research Institute for the trade association HDE and is based on a representative survey of around 1600 households.

The barometer signals a significant decline in consumer income expectations for the next three months. Economic expectations are also declining sharply. In addition, the majority of consumers are preparing for interest rate hikes, which are likely to make consumption on credit more expensive. The propensity to buy also declined slightly.

Consumer sentiment reflects the poor economic data of the past few days. The Ifo business climate fell to a two-year low. According to the head of the Ifo Institute, Clemens Fuest, economic output is likely to shrink in the third quarter. The economic expert at the DIW research institute, Guido Baldi, said that it was “increasingly likely that we will go through a recession with high inflation at the same time”.

In addition to the uncertain energy supply in the coming winter, the sharply rising prices are a particular burden on the economy and consumers.

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According to initial calculations by the Federal Statistical Office, the inflation rate in August was 7.9 percent. Compared to the previous month, the average shopping basket rose by 0.3 percent. Inflation in Germany was last higher 70 years ago during the Korean War. Energy prices rose particularly strongly, being 35.6 percent higher than in the same month last year. Food prices also rose at an above-average rate of 16.6 percent.


Commerzbank even expects a double-digit inflation rate for the coming months, also because the tank discount and the nine-euro ticket expired at the beginning of the month and the new gas levy should take effect from October. On average for the year, bank economists expect inflation in Germany to rise by eight percent, and then by 7.2 percent in 2023, which is significantly higher than in the rest of the euro zone.

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Gradually, however, consumers seem to be getting used to the higher prices. In July, retail sales increased by 1.9 percent in real terms compared to the previous month. The food trade in particular was able to recover somewhat from the slump in sales of the past three months. Nevertheless, compared to March, 6.5 percent less food was sold in July.

According to the Federal Statistical Office, sales in the entire retail trade in the first seven months of the current year were 0.1 percent lower in real terms than in the same period last year. Supermarkets and hypermarkets were clearly in the red, their sales fell by 6.8 percent in real terms.

Labor market is a ray of hope for the economy

On the other hand, trade in textiles, clothing, shoes and leather goods was clearly up, with real sales up 51.8 percent on the same period of the previous year. The sales of department stores and department stores also increased very significantly. On the other hand, 2022 is not likely to be a good year for the Internet and mail order business, which has been spoiled by success. In the first seven months, online retailers turned over 9.6 percent less in real terms than in the same period of the previous year.

logistics center

Online retail has had a rather weak year so far.

(Photo: dpa)

The job market remains the bright spot for the German economy. “Despite the economic and political uncertainties, the labor market is robust,” said the new head of the Federal Employment Agency, Andrea Nahles.

>> Read here: Andrea Nahles: The planned increase in the unemployment contribution could be too low

Unemployment and underemployment increased again more strongly in August than is usual for the time of year. However, this is still due to the inclusion of Ukrainian refugees in labor market statistics. The demand for new staff continues to move at a very high level.

The job index BA-X of the Federal Employment Agency rose by one point to 135 points in August. The Ifo employment barometer, on the other hand, fell slightly by 0.1 to 101.0 points. Nevertheless, the companies still planned to increase the number of employees despite many uncertainties. At the same time, however, the shortage of skilled workers makes it difficult to fill many vacancies.

More: Germany Last among the big players in Europe: These five risks threaten the economy

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