Private consumption showing restraint

Although employment picked up sharply in the fourth quarter, private
consumption was flat on the previous quarter. The number of persons in
employment rose to a record of 44.7 million in the final quarter of 2017, up by
642,000 compared with the previous year.

For the full year, there was a year-
over-year increase of 1.5%. Additionally, wages continued their uptrend. On an
hourly basis (excl. One-off payments), collective wages advanced by 1.9%
(Bundesbank) compared with the same quarter a year earlier, resulting in a
wage drift of 1% relative to effective wages, which edged up by 2.9%. Despite
the positive employment trend, private consumption expenditure was nearly
unchanged and hence fell behind expectations in the second half of the year.