French consumer confidence unexpectedly jumped by the most in almost five years in March as the euro region’s second-largest economy prepares for a possible change of government.
A measure of sentiment rose to 87 from 82 in February, national statistics office Insee said in Paris today. Economists forecast an unchanged reading, according to the median of 16 estimates in a Bloomberg News survey. The gain was the biggest since May 2007, when Nicolas Sarkozy won France’s presidency promising to bolster household purchasing power.
“Every five years people think the next government will do better,” said Dominique Barbet, an economist at BNP Paribas in Paris. “This time they’re opening the champagne early.”
Opinion surveys point to a victory for Sarkozy’s socialist rival Francois Hollande in presidential elections that conclude on May 6. While Sarkozy and Hollande are seen as neck-and-neck in the first round of voting, scheduled for April 22, polls consistently show Hollande leading Sarkozy by an unprecedented margin for the May 6 run-off between the two leading candidates.
European stocks advanced for a third day before a report that may show the U.S. real-estate market is stabilizing. The Stoxx Europe 600 Index (SXXP) rose 0.2 percent to 268.68 at noon in London. The euro gained 0.02 percent to $1.3359.
The increase in French consumer confidence to the highest reading since July comes amid signs the nation has avoided a recession. While Insee said last week that the economy will stagnate in the current quarter, it predicted a return to growth in the three months through June.
The new Insee forecast prompted Sarkozy’s government to lift its prediction for France’s 2012 economic expansion to 0.7 percent. Business confidence is also improving and job losses are slowing as concern about Europe’s sovereign debt crisis fades.
Jobless claims rose by 6,200 in February compared with an increase of 13,400 in January and more than 20,000 in each of the previous four months, according to Labor ministry figures published yesterday.
Elsewhere in Europe, market research company GfK SE predicted that its gauge of German consumer confidence will slip from a 12-month high in April.
In the U.K., retail sales were unchanged in March from a year earlier and stores expect conditions to worsen next month amid rising unemployment and higher energy prices, the Confederation of British Industry said.
Consumer confidence in the U.S. probably fell from a one- year high this month, according to a Bloomberg survey. The New York-based Conference Board’s consumer confidence gauge will be published at 10 a.m. local time.
Today’s French confidence survey showed consumers growing less pessimistic about the outlook for their personal financial situation and about the outlook for living standards in France.
Hollande would win a head-to-head race with Sarkozy, taking 54 percent of the vote compared with 46 percent for the incumbent, according to a biweekly Ifop Fiducial poll for Europe 1 radio, Paris Match and Public Senat published today. The survey was carried out March 22 to 25 among a sample of 1,760 people. The margin of error is about 2.1 percentage points.
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