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French Growth Revised

French Growth RevisedFrench Growth Revised

The French economy grew 0.5% in the first quarter from the previous three months, the INSEE statistics agency said on Friday, revising the figure up from 0.4%.

INSEE nudged up the gross domestic product reading after finding that foreign trade proved to be less of a drag than previously estimated, revising its contribution to GDP to -0.6% from -0.7%, Reuters reported.

INSEE also said that corporate margins eased to 31.7% from 31.8% at the end of 2016 as oil prices and selling prices rose. Wages were largely stable and firms saw productivity gains.

Meanwhile, growth in households real disposable income was unchanged from the previous quarter at 0.1% as higher inflation eroded purchasing power and the savings rate rose to 14% from 13.9% in the previous quarter.

In the government sector, the public deficit rose to 3.3% of economic output from 3.2% in the previous quarter, INSEE said. Government spending rose 0.7% in the first quarter after being stable in the previous quarter, due to an increase in France’s contribution to the EU budget.

Meanwhile revenue growth fell to 0.5% from 0.8% in the previous quarter as corporate tax receipts fell, INSEE said.

Meanwhile, France’s private sector employment grew at its fastest rate in nearly a decade in June, according to a closely-watched series of surveys, as the labor market in the eurozone’s second largest economy picks up pace.

IHS Markit’s monthly business survey–which measures factors including output, expectations, and employment–showed hiring levels were the main bright spot in June’s purchasing manager’s index.

The overall PMI dropped back to 55.3 from 56.9–dipping from four-year highs–but remaining well within growth territory (any number above 50 indicates expansion). A drop back in service sector growth was the main cause of the decline, while manufacturing activity rose to a two-month high of 55.

France’s economic momentum proved resilient during its tightly contested and unpredictable presidential campaign which concluded in May. Official figures released on Friday revealed quarterly GDP growth of 0.5% in the three months to March–exceeding an initial 0.3% estimate.

IHS Markit said optimism among French business remained markedly high–a positive sign for future job creation in an economy where unemployment has fallen to a six-year low.

Signs of an improving labor market will also be a boon to President Emmanuel Macron who is poised to deliver a series of bold changes to the country’s hiring and wage bargaining laws.

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