French glum about economic future

6th January 2005, Comments 0 comments

PARIS, Jan 6 (AFP) - French households were less optimistic about their future economic prospects in December than in November, the national statistics institute INSEE reported Thursday.

PARIS, Jan 6 (AFP) - French households were less optimistic about their future economic prospects in December than in November, the national statistics institute INSEE reported Thursday.

It said its index measuring household sentiment fell to minus 25 points from minus 23 in November, its third straight monthly decline.

It added that consumers were less positive last month about recent changes in their standard of living as well as their future prospects.

"The lack of confidence is ... linked to a weakness in purchasing power gains in 2004," said Nicolas Bouzou, chief economist at the research group Xerfi.

"In two years, 2003-2004, it has only increased 2.6 percent. In 2002 alone it rose 2.5 percent."

Bouzou attributed the sluggish momentum in purchasing power to a jobless rate that remains stubbornly around 10 percent of the workforce.

At Natexis-Banques Populaires, analyst Marc Touati said French households are pessimistic about chances for an improvement in the job market and fear a clear decline in the standard of living in France.

"A logical consequence of these fears is that households say they are more inclined to boost savings and less inclined to consume."

© AFP

Subject: French News

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