German consumer sentiment improves more quickly than expected in July, GfK says

The consumer climate was expected to continue improving in July, although the latest Covid-19 lockdowns might act as a drag.

Consultancy GfK's consumer confidence gauge jumped from a reading of -18.6 for June to -9.6 in July easily surpassing the -12.0 print expected by economists.

Yet the steady rebound predated the recent reimposition of a lockdown in North-Rhine Westphalia, which might be expected to act as a drag, said Pantheon Macroeconomics's Claus Vistesen.

Nonetheless, said Vistesen: "Local containment efforts are almost surely the optimal strategy to cope with the virus as economies reopen, but it will still be a blow overall, when they arise."

The economist also pointed to the solid details of the survey what with the sub-index for expectations moving back above zero for the first time since March, together with an improved outlook for incomes and willingness-to-buy.

A sub-index tracking inflation expectations on the other hand dropped sharply, on the back of discounting to get Germans to part with their money.