German consumer confidence rising

German consumer confidence is rising, helped by rise income expectations & job market that's remained stable despite the recession, a survey showed. The GfK research group said its forward-looking consumer climate index for July stood at 2.9 points, up from Junes revised 2.6 points. The Nuremberg-based agency noted consumer sentiment remains at a low level overall, but said recent uptick, after a period of stagnation, was encouraging. "Following the recent growing number of signs economic downturn may be at an end, consumer hopes of economic stabilization are intensifying &, economic expectations are rising moderately," GfK said. Reports inflation stood 0% in May & employment remained fairly robust helped boost consumers' income expectations and their propensity to buy, it said. The jobless rate fell slightly to 8.2% in May, thanks to a regular spring boost, but showed no signs of a lasting recovery. The gov't. predicted number of Germans out of work will average 3.7M this year -- a rise of 450,000 from 2008 -- before rising sharply next year to 4.6M. "The real test is yet to come, given likelihood of rising unemployment in months ahead," GfK said. Analyst Alex Koch, with HVB-UniCredit Group, said he expects job uncertainty will rise consumer behavior in coming months. "This is underscored by extensive layoff plans of cos. & record-high unemployment expectations." Germany, Europe's biggest economy, went into recession last year as the global crisis sapped demand for its exports. While surveys of business & investor confidence turned upward recently, forecasts remain gloomy. Germany's central bank predicted this month the economy will shrink by 6.2% this year and stagnate in 2010. The RWI research group revised its prediction downward again, saying it now expects a 6.4% GDP drop in '09 -- even worse than the Bundesbank's prediction. It said, however, the drop should taper off, & that by the end of next year "a light GDP increase of 0.2% is possible." According to the GfK report, consumer expectations for the next 12 months rose in June for the third month in a row, rising 5.7 points from May to - 22.6 points. "Economic pessimism is declining somewhat & consumers seem to be expecting the steep economic drop can gradually be halted," it said. The GfK survey is based on around 2,000 consumer interviews conducted each month.