French consumer spending falls back in June
Better weather reduces energy spending following a cold May that had sent heating bills higher
Consumer spending rose in May as higher heating bills lifted figures, but better weather in June reversed that effect.
French consumers tightened their purse strings again in June after a bounce in consumption in May, with both moves largely due to weather conditions and highlighting the fragility of any nascent recovery.
French consumer spending fell 0.8 per cent in June from May, largely because of reduced energy spending as the weather got better after a cold May that had sent heating bills up. Analysts polled by Reuters had expected a slight rise in June.
Overall, consumer spending edged up 0.3 per cent in the second quarter, data from stastics office INSEE showed, largely on higher energy spending but still backing government forecasts that the economy may have exited a shallow recession.
“These figures add to the evidence showing that the French economy may have exited recession during the second quarter of the year,” said Diego Iscaro, at IHS Global Insight.
“We still project private consumption to remain under pressure during the second half of the year, particularly given that labour market conditions remain very tough.”
Analysts had forecast on average that spending edged up 0.1 per cent in June, according to a Reuters poll of 15 economists.
The drop in consumer spending in June followed a revised 0.7 per cent bounce in May, which had partly been due to higher spending on energy during bad weather.