HDE consumer barometer: Consumer sentiment in Germany is deteriorating

Dusseldorf. Consumers in Germany are looking forward to the final quarter of the year with a subdued mood. This is shown by the HDE consumption barometer, which slipped by 1.19 points to 93.51 points for October. The index is therefore around three points lower than in the same month last year.

The consumption barometer is calculated monthly by the Handelsblatt Research Institute for the HDE trade association. It consists of several sub-indicators and is based on a representative survey of around 1,600 households.

Compared to the previous month, expectations for the economy and personal income development fell. At the same time, concerns about inflation and interest rate increases as well as the tendency to save decreased - consumers are apparently compensating for the loss of real purchasing power by saving less and liquidating reserves.

The poor mood among consumers contrasts with the better economic data of the past few weeks. The German economy grew surprisingly strongly in the first half of the year. Early indicators such as the Ifo business climate index signal further growth. And economic researchers revised their expectations for 2026 and 2027 upwards to a good one percent real growth.

The public hardly seems to notice all of this. The debate is characterized by massive job cuts in the auto industry, high gasoline prices and concerns about gas shortages in the winter. According to a survey by the Allensbach Institute, more than half of citizens see “Germany in a downward spiral”. The political fringes are growing stronger, while the incumbent federal government is unable to find answers to this uncertainty.

In fact, almost 800,000 more people are unemployed today than before the corona pandemic. In September alone, the seasonally adjusted number of unemployed people rose by 12,000 people. And all those who have kept their jobs do not have any more real money available today than they did in 2019. If the increased social security contributions are taken into account, the real disposable income is currently often lower than before the pandemic.

Further premium increases are expected for the coming year. The net income of many employees is likely to continue to decline. The upswing that official statistics measure is hardly reflected in many people's everyday lives.

The poor mood among consumers is also reflected in retail. In August, retailers achieved 1.3 percent more real and calendar-adjusted sales than in July. But compared to August 2025, real sales were 0.4 percent lower.

The mood in retail is correspondingly bad. The business climate for the sector is at -26.8 points, so the number of pessimists is significantly larger than the number of optimists. The business expectations are estimated to be much bleaker than the current situation - so the prospects, especially for the important Christmas business, are poor.

The business climate is comparatively favorable in the Internet and mail order trade with -17.7 points and in the motor vehicle trade (excluding repairs) with -19.1 points. The situation and outlook are particularly poor in the “food and beverages, beverages and tobacco products” segment with -37.2 points and in the trade in “other household appliances, textiles, DIY and furnishing supplies” with -29.9 points.

The Handelsblatt Research Institute therefore expects private consumption to grow by only 0.5 percent this year and 0.9 percent next year. Measured against the pre-crisis level in 2019, private consumption is likely to be around six percent higher - spread over a population that has now grown. For comparison: in the same period, government consumption grew by almost 20 percent.

According to a report by “Spiegel”, the Federal Ministry of Finance has now also internally corrected the state quota upwards – to 52 percent for this year and even to 52.4 percent for 2027. The ministry had previously calculated a state quota of 51.4 for this year and 51.5 percent for next year. According to the new calculations, Germany would have the highest government quota since 1960 - and would break the previous record from 2021 (51.1 percent). At that time, the pandemic caused unusually high government spending.

Such brisk government activity must be financed in the form of taxes and duties or interest on new debts. Ultimately, this leaves less and less money for private consumers and the private sector. The economy appears to be recovering. But as long as people don't notice this in their wallets, there will be no optimism.