German Confidence Jumps

Bloomberg details:

German investor confidence jumped to its highest level in more than three years in August after government stimulus and rising exports pulled Europe’s largest economy out of recession.

The ZEW Center for European Economic Research said its index of investor and analyst expectations rose to 56.1 from 39.5 in July. Economists predicted a gain to 45, according to the median of 35 forecasts in a Bloomberg News survey. That’s the highest since April 2006. The survey aims to predict economic developments six months in advance.

“The German economy is out of recession, but not out of the woods,” said Carsten Brzeski, an economist at ING Groep NV in Brussels. “In all the enthusiasm about the recent numbers and the near-term outlook, there are still some impediments to a real recovery, the most pressing one being the worsening labor market.”

ZEW’s gauge of the current economic situation rose to minus 77.2 from minus 89.3 in July, an improvement that the Mannheim, Germany-based institute said was helped by last week’s GDP figures. A survey of 19 economists expected a reading of minus 85. The Economy Ministry has said its forecast for a 6 percent economic contraction this year may now be too pessimistic.

Economic Sentiment vs. Economic Situation


The following chart is just an average of the current sentiment and outlook (how important is the view that things will improve if current levels are awful). Again, much improvement.



Source: ZEW.de