Households begin to see the recent improvements on the employment front. They are more optimistic about their future financial situation.
The situation is somewhat paradoxical. While conflicts around Labour Bill harden, the morale of French households as measured by INSEE, reached its highest level in May since October 2007. The rise is sharp compared to April (+4 points). At 98 points, the balance is not far from the long term average (100 points). This surprising improvement is explained when we know that the French INSEE questions on specific issues, relating to their personal circumstances, and not on the general political climate in France.
So the households surveyed are beginning to see the recovery in employment – in the first quarter, private companies have created 24,400 jobs and the number of unemployed decreased for the second consecutive month in April. “Fears of households about unemployment fall in May: the corresponding balance lost 28 points and is below its long term average. It thus reached its lowest level since June 2008, “notes INSEE.
Similarly, households perceive the decline in inflation. They are less likely to anticipate that prices will rise in the coming months. Therefore, they are more confident about the future living standards in France. Even optimism for their personal situation. “In May, households opinion about their future financial situation has improved significantly (+4 points)” said INSEE. Result, the proportion of French felt it appropriate to make major purchases also climbs (+7 points).
Overall, this rise in household confidence bodes well for future developments consumption. A consumer who has already been strong in the first quarter (+ 1.2%).
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