French consumer spending dropped slightly in November compared with the previous month, narrowly undershooting expectations as shoppers splashed out on cars but cut back elsewhere.
National statistics office Insee said consumer spending on manufactured goods fell by 0.1 per cent in November, below expectations for a reading of 0.0 per cent and following a downwardly revised increase of 1.0 per cent in October.
"Overall it's a sign of worsening conditions in the labour market - slowing wage growth will come to the fore and consumers will become increasingly reluctant to spend," said Joost Beaumont, an economist with Fortis.
"That was reflected slightly in textiles and manufactured goods. This is payback for strong rises in previous months, and overall it signals weak consumer spending in the coming months."
The slight fall in consumer spending was partially driven by a 1.8 per cent decline in the purchase of leather and textile goods and a fall in appetite for watches and jewellery.
However, car sales did well, rising 4.2 per cent due to consumer eagerness to take advantage of the government's cash for car scrappage scheme before it draws to a close on January 1st.
Reuters