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.
“The main cause of concern is the ongoing fall for food and clothing,” said Dominique Barbet, an economist at BNP Paribas in Paris. “This is driven by medium and low-income households that are reducing their consumption in response to declining purchasing power. This is likely to last, at least in the early part of 2012.”
Spending on food dropped 1 percent in the month, Insee said. 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 a 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 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.