Consumer confidence among Germans is expected to strengthen in May as a key survey showed that households are more positive about their income prospects following higher expectations for wage growth amid moderating inflation.
The German Gfk Consumer Sentiment Index, which gauges the degree of optimism consumers feel about the overall state of the economy and their personal financial situation, improved from -29.3 in March to -25.7 in April, above expectations of -27.5.
In April, economic expectations soared from 3.7 to 14.3 and income expectations rose from -24.3 to -10.7.
The propensity to buy segment of the index jumped from -17.0 to -13.1. Sentiment is back on track to recovery after a slowdown last month, but “the value still remains below the pre-pandemic level of about three years ago,” GfK consumer expert Rolf Buerkl said.
Meanwhile, a report released by the Conference Board on Thursday showed that its index of leading US economic indicators fell sharply in March, suggesting worsening economic conditions ahead.
The latest Conference Board Leading Economic Index (LEI) for March slipped to 108.4 from February’s revised figure of 109.7, marking the twelfth monthly decline in a row and the lowest level since November 2020.
The latest reading represented a 1.2 per cent month-over-month decline, worse than the forecast 0.6 per cent fall, and the sharpest drop since April 2020.
The latest US economic data suggests a recession is coming, according to the chief executive of financial advisory firm Longview Economics.
Finally, Australian inflation retreated from its highest level in 33 years in the first quarter of this calendar year, as the cost of living saw the smallest rise in more than a year, suggesting there will be less need for the central bank to raise interest rates.
The headline consumer price index for the first three months of 2023 came in at an annual rate of seven per cent according to the Australian Bureau of Statistics. This was in line with economists’ predictions, and slower than the 7.8 per cent pace registered in the December quarter.
However, a cause for concern for the Reserve Bank of Australia, according to Commonwealth Bank of Australia’s head of Australian economics Gareth Aird, is that almost all the inflation over the past three months was domestically generated and not caused by higher imported energy prices.
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