Global| Aug 25 2010German IFO Index Strengthens Unexpectedly
Summary
This is the early release of the German IFO report. It shows a much brighter picture of the economy in Germany than had been expected. On first release Germany’s IFO does not provide us with that rich detail for which that the index [...]
This is the early release of the German IFO report. It shows a much brighter picture of the economy in Germany
than had been expected. On first release Germany’s IFO does not provide us with that rich detail for which that
the index is so admired. But the early release of major indices shows us an
economy with still expanding sector indices.
Germany’s overall business climate reading advanced from 106.2 in July to 106.7 in August. This bucks the trend of weaker August readings we saw in the Zew report and in the PMI releases from Markit. Instead, the German IFO industry level respondents, not the financial experts that Zew surveys use, tell us that after that stellar Q2 German growth figure the economy has kept improving. As of August- two months after the end of the quarterly reporting period for GDP-, things are still improving in Germany. This is an unexpected piece of good news.
The IFO shows continuing gains in the current situation with a slight pull back in expectations (form 105.6 to 105.2) but with strong gains in its current index. The overall business climate index advanced strongly.
| IFO Survey: Germany | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Percent: Yr/Yr | Index Numbers | ||||||||
| Aug 10 |
Jul 10 |
Jun 10 |
May 10 |
Apr 10 |
Current | Mo-Ago | Curr/Avg | pctile | |
| Biz Climate | 17.9% | 21.5% | 18.4% | 20.4% | 21.5% | 106.7 | 106.2 | 111.5% | 91.7% |
| Current Situation | 25.7% | 26.8% | 22.8% | 20.6% | 19.2% | 108.2 | 106.8 | 113.8% | 77.9% |
| Biz Expectations: Next 6-Mos | 10.5% | 16.4% | 14.0% | 20.3% | 23.9% | 105.2 | 105.6 | 109.2% | 98.6% |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
More Economy in Brief
