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German consumer hopes for June remain steady

GERMAN consumer expectations for the coming month held steady in May, as anxiety over job security weighed on broader hopes that the economy may be improving, according to a survey released yesterday.

The GfK research group said its forward-looking consumer climate index for June remained at 2.5 points, unchanged from May and April levels.

The economic crisis has had little impact on consumer confidence in recent months, but income expectations dropped amid job loss fears, and the overall indicator remains low.

"Consumer sentiment has yet to face a real test when confronted by the anticipated rise in unemployment," the GfK said in a statement.

Germany's export-driven economy went into recession in the third quarter of last year. Unemployment is rising, but job losses have not yet spiked dramatically. Income expectations in Germany fell 1.3 points to minus 9.3 points in May, the survey found.

Meanwhile, improvement in consumers' expectations for the economy suggests that households believe steep declines in Europe's largest economy have bottomed out and could stabilize later this year. The survey found expectations improving 2.9 points to minus 28.3 points.

"In spite of the ongoing marked economic pessimism, consumers are nevertheless assuming that the worst is behind us," the statement added.

The Federal Statistical Office in Wiesbaden said on Monday that Germany's economy shrank 3.8 percent in the first quarter, confirming preliminary data released earlier this month.


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