French household spending falls in June

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Household consumption dropped 0.4 percent in June after a surprise revised gain of 1.7 percent in May.

24 July 2008

PARIS - Household consumption dropped 0.4 percent in June after a surprise, revised gain of 1.7 percent in May, official figures showed Wednesday.

Compared with 2007, household purchases of manufactured goods - which accounts for about one quarter of all personal consumption in France - were up 1.0 percent, the INSEE national statistics office said.

For the three months to June, consumption was flat compared with the first quarter of the year.

Analysts said the figures showed a marked slowdown from May, reflecting the impact of rising prices for food and energy.

"Since the first quarter, there has been a clear slowdown in household consumption due to the pickup in inflation driven by rising oil and food prices," said Mathieu Plane of the OFCE think tank.

This "has drastically reduced household purchasing power," noted Marc Touati, economist with Global Equities.

[AFP / Expatica]

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