Bloomberg News

French Consumer Confidence Drops on Joblessness, Budget Cuts

September 26, 2012

French consumer confidence fell for a third month on concern that surging joblessness and President Francois Hollande’s plans to slash the budget deficit will hurt pocketbooks.

Household sentiment dropped to 85 in September from 86 in August, national statistics Insee said today in a release from Paris. Economists had expected a reading of 86, according to the median of 13 estimates gathered by Bloomberg News.

With companies such as PSA Peugeot Citroen SA (UG) and Air France-KLM Group cutting thousands of staff and growth stalling for the past three quarters, unemployment has jumped to a 13- year high. That’s hurting confidence in a month when Hollande has pledged 20 billion euros in tax increases and 10 billion euros in spending cuts for the coming year.

“Consumers will be hit by the budget,” said Joost Beaumont, an economist at ABN Amro in Amsterdam. “The outlook for spending is quite weak.”

Labor Minister Michel Sapin said that jobless claims have already crossed 3 million. His ministry publishes its latest estimate of claims at 6 p.m. Paris time today.

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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