By Mark Deen
Dec. 23 (Bloomberg) -- French consumer spending unexpectedly fell in November as concern about unemployment outweighed the impact of government incentives to buy new cars.
Spending on manufactured goods declined 0.1 percent from October, national statistics office Insee said in a statement today. Economists expected a 0.5 percent gain, the median of 10 estimates in a Bloomberg survey showed. November spending rose 3.2 percent from a year earlier
By Mark Deen
Dec. 23 (Bloomberg) -- French consumer spending unexpectedly fell in November as concern about unemployment outweighed the impact of government incentives to buy new cars.
Spending on manufactured goods declined 0.1 percent from October, national statistics office Insee said in a statement today. Economists expected a 0.5 percent gain, the median of 10 estimates in a Bloomberg survey showed. November spending rose 3.2 percent from a year earlier and October’s month-on-month increase was revised down to 1 percent from 1.1 percent.
French households are grappling with joblessness at a three-year high in the wake of the deepest recession in more than half a century. While subsidies have spurred car sales, consumers are cutting back in other areas, causing spending to drop in six of the first 11 months of 2009.
“When people spend on cars they tend to cut back in other areas,” said Dominique Barbet, an economist at BNP Paribas in Paris. “Unemployment is unlikely to peak before next spring.”
France’s jobless rate climbed to 9.5 percent in the third quarter, the highest since the first quarter of 2006, as Air France-KLM Group shrank its workforce. The number of unemployed actively looking for a job in October rose by 52,400. The labor and finance ministries report their latest figures tomorrow.
Auto Incentives
Meanwhile, car sales are surging. Motorists and automobile manufacturers benefited as the government offers 1,000 euros ($1,500) to buyers who trade in old cars to purchase new ones. That subsidy will be cut in half on Jan. 1.
French car sales jumped 48 percent in November, the seventh consecutive monthly increase, to 216,452 vehicles, the national automakers association said on Dec. 1.
Total spending on cars rose 4.2 percent in the month, lifting demand for durable goods by 2 percent, Insee said today. By contrast, spending on textiles and leather goods fell 1.8 percent, while industries including home improvement and jewelry also posted declines.
“The impact of unfavorable labor market conditions will increasingly come to the fore, leaving spending lackluster going forward,” said Joost Beaumont, an economist at Fortis Bank in Amsterdam.
To contact the reporter on this story: Mark Deen in Paris at markdeen@bloomberg.net and October’s month-on-month increase was revised down to 1 percent from 1.1 percent.
French households are grappling with joblessness at a three-year high in the wake of the deepest recession in more than half a century. While subsidies have spurred car sales, consumers are cutting back in other areas, causing spending to drop in six of the first 11 months of 2009.
“When people spend on cars they tend to cut back in other areas,” said Dominique Barbet, an economist at BNP Paribas in Paris. “Unemployment is unlikely to peak before next spring.”
France’s jobless rate climbed to 9.5 percent in the third quarter, the highest since the first quarter of 2006, as Air France-KLM Group shrank its workforce. The number of unemployed actively looking for a job in October rose by 52,400. The labor and finance ministries report their latest figures tomorrow.
Auto Incentives
Meanwhile, car sales are surging. Motorists and automobile manufacturers benefited as the government offers 1,000 euros ($1,500) to buyers who trade in old cars to purchase new ones. That subsidy will be cut in half on Jan. 1.
French car sales jumped 48 percent in November, the seventh consecutive monthly increase, to 216,452 vehicles, the national automakers association said on Dec. 1.
Total spending on cars rose 4.2 percent in the month, lifting demand for durable goods by 2 percent, Insee said today. By contrast, spending on textiles and leather goods fell 1.8 percent, while industries including home improvement and jewelry also posted declines.
“The impact of unfavorable labor market conditions will increasingly come to the fore, leaving spending lackluster going forward,” said Joost Beaumont, an economist at Fortis Bank in Amsterdam.
To contact the reporter on this story: Mark Deen in Paris at markdeen@bloomberg.net
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