French Consumer Spending Falls as Jobless Claims Surge
(Corrects decline in second paragraph.)
French consumer spending fell in December as surging joblessness and concern about looming tax increases prompted households to cut back.
Spending fell 0.7 percent from November, when it fell 0.1 percent, national statistics office Insee said today in an e- mailed statement. Economists expected an increase of 0.2 percent, according to the median of 18 estimates gathered by Bloomberg News.
Household purchases have hovered around zero since August and were down 3.1 percent in December from a year earlier, underlining consumer pessimism as Europe’s second-largest economy tips into recession. Jobless claims jumped to as 12-year high of 29,700 in December as President Nicolas Sarkozy prepared to implement the second-round of tax increases and spending cuts in less than half a year.
“Consumers are being pressured by the growing unemployment and the coming austerity,” said Pierre-Olivier Beffy, chief economist at Exane BNP Paribas in London.
The nation’s gross domestic product probably shrank in the fourth quarter and may do so again in the three months to March, Insee estimated last month.
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