Thursday, May 31, 2007

French Consumer Confidence Jumps In May, Thursday, May 31, 2007 8:33:09 AM

French consumer confidence improved significantly in May, after the election of new President Nicolas Sarkozy, official data indicated Thursday.

The statistical office Insee said the seasonally adjusted summary indicator of consumer confidence gained six points to minus 14 in May from minus 20 in April. The increase is the highest since June 1997. Economists were looking for a reading of minus 19 for May.

Analysts opined that the main reason behind the jump in consumer confidence may be the election of the new President and the initial weeks of the presidency, when new leaders unveil their plans. That said, further improvement in consumer confidence largely depends of the decisions made by the new government.

Among the sub indices, a sharp improvement was noted in the gauge for the outlook on the French living standards. The indicator shot up to minus 2 from minus 17 last month.

Meanwhile, the index reflecting the likelihood of major purchases remained unchanged at minus 10. The trend indicates that the surge in household confidence may not completely feed into consumption, analysts said.

The outlook on personal financial position also improved markedly. The corresponding indicator climbed to a level of 6 from zero in the prior month.

A day earlier, the statistical office released data that revealed that French jobless rate fell to a 24-year low. The unemployment rate, as per ILO definition, dipped to 8.2% in April, the lowest since 1983, from 8.3% in March. The rate was in line with expectations. A year ago, the rate was 9.3%. The number of unemployed dropped 20,000 in April.

Separately, the Insee reported Thursday that producer prices climbed 0.5% on month in April, after gaining 0.3% in the prior month. Prices rose 1.9% over last year. Excluding energy and agri food, producer prices moved up 0.3% in April, after remaining steady in March.
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