21 February 2002, 10:57 French consumer spending on manufactured goods weaker than expected
PARIS (MktNews) - French consumer spending on manufactured goods
was weaker than nearly all analysts expected in January with a 0.4%
monthly decline led by durable goods, according to seasonally and
calendar-adjusted estimates released Thursday by the national statistics
institute Insee.
The disappointing results will raise doubts about the timing and
strength of the expected recovery this spring, as consumer spending had
helped cushion the economy against falling investment and foreign
demand. Moreover, spending gains in December and November were trimmed
by 0.1 percentage point each.
Most analysts had forecast a further modest rise on the month,
counting on higher incomes, households' cash reserves ahead of the euro
changeover and abundant savings to offset the dampening effect of rising
unemployment. However, the switch to euro prices and an uptick in
inflation may have discouraged shoppers who usually increase outlays
during January's retail discounts.
Spending fell in all main categories in January, led by household
durables (-1.5%) and autos (-0.8%) -- big-ticket purchases that are
usually seen a measure of consumer confidence. The results confirm the
sharp drop in buying-propensity signaled in Insee's January household
survey.
Excluding the auto sector (and medical products), spending was down
1.0% on the month and only 0.2% higher on the year in January. Textile
and leather goods sales dipped 0.2% on the month, despite retail
discounts on clothing goods, and were 1.4% lower on the year.
Sales of other manufactured goods, which include cosmetics, drugs,
car parts, jewelry, photo and sporting goods and account for over 40% of
total spending, were flat on the month and 1.0% higher on the year.
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