German consumer morale reaches 16-year high heading into August

BERLIN, July 27 (Reuters) - Already-buoyant German

consumer sentiment continued to rise further heading into August, the GfK market research group said on Thursday. The GfK consumer sentiment indicator, based on a survey of 2,000 Germans, rose to 10.8 going into August from 10.6 recorded in July. The 10.8 reading was the highest level since 11.0 in October 2001. A Reuters poll had forecast an unchanged reading of 10.6 from last month. "In the opinion of consumers, the German economy is now firing on all cylinders," Rolf Buerkl, a researcher for Nuremberg-based GfK, said in a statement. He noted that economic expectations and income expectations continued to rise. "Consumers are expecting that the domestic economy can even pick it up a notch over the course of the remainder of the year." Germany's robust labour market, with unemployment reaching new lows each month, continues to fuel consumption and growth. Buerkl noted that consumers appear to be undisturbed by global risks such as the start of Brexit talks, the threat of U.S. tariffs on imports, and the increasingly difficult relations between Germany and Turkey.

Aug 17 Jul 17 Aug 16 Consumer climate 10.8 10.6 10.0 Consumer climate components Jul 17 Jun 17 Jul 16 - willingness to buy 54.8 57.9 55.4 - income expectations 60.9 60.2 49.7 - business cycle expectations 44.6 41.3 9.4

NOTE - The consumer climate indicator forecasts the development of real private consumption in the following month. An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop in comparison with the same period a year ago. According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1 percent in private consumption. The "willingness to buy" indicator represents the balance between positive and negative responses to the question: "Do you think now is a good time to buy major items?" The income-expectations sub-index reflects expectations about the development of household finances in the coming 12 months. The additional business-cycle expectations index reflects the assessment of those questioned of the general economic situation in the next 12 months.

(Editing by Larry King)