Household consumption fell in October

Household spending on manufactured goods fell 0.4% in France in October, a figure not bode well for growth in the fourth quarter. Affected by lower purchases of cars and textiles and leather, the INSEE statistics shows above all, according to economists that the rise in unemployment and the tightening of credit conditions hamper the enthusiasm of consumers. The decrease of 0.4% in seasonally adjusted, following an increase of 0.5% in September (compared to revised 0.6% announced in the first estimate). Consumption stabilized On a year, household spending on manufactured goods - which represent a quarter of their total consumption - not advancing more than 0.7%. "The important point is that, since January, the volumes consumed are not progressing," Judge Nicolas Bouzou, an economist at Aster. The explanation is simple he says. Earlier this year, price increases had affected the purchasing power and led households to stabilize their consumption, he said. Unemployment Since the summer, the problem of inflation gave way to rising unemployment, leading to a double impact: a moral household historically low, which does not consume, and a moderation of wage demands in a context of destruction of jobs for the second and third quarters. The decline in the housing market, drawing down spending on appliances and furniture, also weighed on the trend as the blocking of consumer credit. "The production of specialized schools has barely increased over the first nine months of the year. Contrary to what has been observed in previous cycles, consumer credit came not take over the purchasing power to support the expenditure ", said Nicolas Bouzou. Prudence Down 0.1% in the first quarter, household consumption remained stable in the second quarter before rising to 0.2% in the third, contributing to the unexpected growth (+0.1%) of gross domestic product. But the economist Aster expects a relapse of 0.4% of GDP in the fourth quarter. "The uncertainties on the economic and labor market have certainly made consumers cautious, offsetting the positive effect of the decline in inflation," confirms Joost Beaumont, an economist at Fortis. "We expect that these negative factors continue to prevail in the short term, leaving consumption sluggish." Drop in automotive In October, car purchases fell 0.9% after rising 0.6% the previous month. Spending on textiles and leather, which had rebounded 2.8% in September, have folded in turn -0.6%. Spending on capital equipment housing have instead increased by 0.2% as in September, supported by purchases of electronics. They remain up 4.7% year on year, but it is far from the peak of 16% over that recorded in mid-2007, said Mathieu Kaiser, economist at BNP Paribas. "SINISTROSE" While noting that the outlook for consumption remains "poor" for the quarters ahead, Mathieu Kaiser believes that the decline in inflation will support the morale and the purchasing power of households. Referring to a "sinistrosis," Marc Touati, at Global Equities, plans to a "month of November still soft, the holiday season and the winter sales good bill but without more, then crossing Desert until the summer, which should also mark the end of the recession French. "