Bloomberg News

French Consumer Spending Climbed in August After July Drop

September 30, 2011

Sept. 30 (Bloomberg) -- French consumer spending on manufactured goods climbed in August on expectations economic growth may recover.

Household spending on industrial products rose 0.2 percent, after declining 0.2 percent in July, national statistics office Insee said today in an e-mailed statement. Economists expected a 0.1 percent gain in August, according to the median of 8 estimates gathered by Bloomberg News.

The increase comes after spending dropped the most in at least six years in the second quarter. While economists expect spending to pick up, household demand will probably contribute less to French growth in the months ahead as the government seeks to trim the budget deficit and joblessness persists.

“Unemployment fears remain a primary concern” and “households are growing more pessimistic,” said Marion Laboure, an economist at Barclays Capital in Paris.

President Nicolas Sarkozy’s government said this week that spending on state services will drop next year in the face of rising debt-service costs and pension charges. The budget also calls for a 3 percent tax on all incomes exceeding 500,000 euros ($681,200).

--Editors: Jennifer M. Freedman, Jeffrey Donovan

To contact the reporter on this story: Mark Deen in Paris at markdeen@bloomberg.net.

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net.


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