German domestic demand better hurry up and improve before there’s no household income growth left to support it. Or export growth.

That said, Germany output and employment has been outperforming the rest of europe, much the way Texas and North Dakota may outperform in the states. When the federal deficit is too small as evidenced at the macro level by unemployment and excess capacity in general, it doesn’t necessarily have the same effect on all members.

German Household Income Y/Y: