German consumer morale inches up but US trade policy weighs
German consumer morale inches up but US trade policy weighs (Photo: AP)
German consumer sentiment inched up heading into June, a key survey showed Tuesday, but erratic US trade policy and a glum domestic economic outlook kept the gauge at low levels.
The forward-looking indicator, published by pollsters GfK and the Nuremberg Institute for Market Decisions (NIM), came in at minus 19.9 points, a rise of 0.9 from the previous month.
It was the third-straight increase for the regular survey of about 2,000 people, which has been boosted by a new German government vowing to kickstart Europe's top economy following two years of recession.
However, the small rise for June indicated that "uncertainty among consumers is still high," NIM consumer expert Rolf Buerkl said.
"The erratic tariff and trade policies of the US government, turbulence on the markets and fears of a third year of stagnation in a row are keeping consumer confidence weak."
US President Donald Trump has threatened and imposed a range of tariffs on allies and adversaries alike, with duties announced in early April causing stock markets to slide worldwide before many of them were paused or softened.
Trump Friday sent European markets into a tailspin after threatening a 50-percent duty on European Union exports before announcing a pause Monday.
The survey showed consumers having markedly rosier expectations for their incomes and for the economy as a whole, but that was not enough to lead to a big rise in confidence overall.
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"People apparently prefer to save, given the overall economic situation," Buerkl said.
Chancellor Friedrich Merz has won parliamentary approval for a fiscal "bazooka" aimed at unleashing vast new spending on infrastructure and defence, which is expected to boost growth.
But the effects of Trump's tariffs are set to be felt sooner, and to hit export-dependent Germany hard. The government in April downgraded its growth forecast for 2025 to zero.
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