French consumer spending suffered its sharpest drop in more than six years in August as a heatwave kept customers away from clothing racks.
The 2.7 per cent fall followed a rise in spending of 1.1 per cent in July, said national statistics office INSEE, which simultaneously released data for both July and August.
The drop in August was the biggest since November 1996, when French consumer spending fell 3.3 per cent month-on-month. August consumer spending was down 1.7 per cent year-on-year, INSEE said.
Sweltering temperatures in August, the highest ever recorded in France, killed 11,400 and shrivelled many crops.
"These figures really are the result of the heatwave in the country . . . but the amplitude of the fall in August is quite surprising," said Mr Nicolas Claquin, economist at CCF. "This bad performance confirms our recession scenario for the third quarter with a negative GDP," he said.
French gross domestic product fell 0.3 per cent in the second quarter after expanding 0.2 per cent in the first quarter. A second consecutive quarter of contraction would put France in technical recession, like its neighbours Germany and Italy.
Monthly data on spending, traditionally the main driver of growth in France, has seen sharp ups and downs over the last year. INSEE revised its June figure to show a rise of 0.8 per cent versus a previously reported increase of 0.5 per cent.
The spending decline in August was driven by an 8.9 per cent fall in household purchases of clothing and shoes as winter sweaters and coats sat untouched following the end of the July retail sales period.
Purchases of other manufactured goods fell by 1.7 per cent, while spending on cars eased 0.3 per cent.