World Economy

French Consumer Confidence Highest Since 2007

French Consumer Confidence Highest Since 2007
French Consumer Confidence Highest Since 2007

French consumer confidence jumped to its highest level since October 2007 in September, above all analysts’ expectations and suggesting the traditional driver of growth in the eurozone’s second-biggest economy is beginning to see a timid recovery.

The surge in households’ confidence will be welcome news for the Socialist government, coming a day after the number of job seekers rose to a new record, a major setback for President Francois Hollande, Reuters reported.

The official INSEE statistics agency said on Friday its indicator rose by 3 points to 97 in September after five consecutive months of stagnation at 94. The August figure was revised up from 93 previously.

A Reuters poll of 15 economists had given an average forecast of 94. The highest forecast was 94 and the lowest was 92. The indicator remains below its long-term average of 100, a level it has not risen above since the start of the financial crisis in September 2007.

In a good sign for future consumer spending, the number of households which considered making big ticket item purchases rose by 4 points to above its long-term average, INSEE said.

The rise in consumer confidence comes after morale in French industry rose in September to its highest level since July 2011, in a boost for the government’s claim that its efforts to ease the tax burden on companies is working.

This week there was confirmation of zero economic growth in the second quarter, but there was also news that French private-sector business activity rebounded in September from its summer torpor, with manufacturing output swinging back to growth after two consecutive months of decline.