German consumer confidence unexpectedly rebounds as the impact of tariffs declines.

On April 29, despite the warning of the impact of U.S. trade policies on the economy, German consumer confidence unexpectedly rose, and consumers pinned their hopes on the stability of the incoming new government. The GfK consumer confidence index rose to -20.6 in May, 3.7 points higher than in April and also higher than market expectations. NIM consumer expert Rolf Buerkl said Trump’s tariff action, which began on the eve of the investigation, has yet to have a lasting impact on consumer sentiment. The survey shows that consumers’ income expectations and purchase intentions have risen significantly, and even economic expectations have improved slightly. Consumers appear to be more affected by the negotiations to form a government after the February election. “It is now clearly more important for German consumers to form a government as soon as possible, which has led to a decline in the importance of key factors that previously constituted uncertainty,” Buerkl said. The survey also showed a decline in the consumer savings rate, which was previously the main issue hindering the recovery of economic activity.