German Consumer Confidence Falls for Third Month on Job Fears

By Simone Meier

Dec. 22 (Bloomberg) -- German consumer confidence declined for a third month as households grew more concerned about rising energy costs and job cuts, market-research company GfK AG said.

Nuremberg-based GfK said its sentiment index for January, based on a survey of about 2,000 people, fell to 3.3 from a revised 3.6 in December. Economists forecast the index would slip to 3.5 from an initially reported December reading of 3.7, the median of 19 estimates in a Bloomberg News survey showed.

Crude oil prices have surged 85 percent over the past year, undermining confidence just as the economy recovers from the worst recession in over six decades. While Germany’s jobless rate declined in November, unemployment concerns continue to weigh on sentiment, GfK said. It projects consumer spending will stagnate in 2010 after rising 0.5 percent this year.

“The expectation of rising prices in the energy sector is currently having a dampening effect,” GfK said. “Looming uncertainty as a result of worsening conditions on the labor market is leading to a perceptible increase in the propensity to save. This is also weighing on the consumer climate.”

GfK’s measure of consumers’ economic expectations rose to 1.7 in December from 0.9 in November, today’s report showed. The gauge was at minus 32.4 a year ago.

An index of income expectations rose to 15 from 6.2 and a gauge of consumers’ propensity to spend fell to 21.2 from 26.3.

To contact the reporter on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net.