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Economy in Brief

 French Service Sector Outlook and Climate Gauges Slip
by Robert Brusca April 28, 2008

The French service sector climate indicator is down sharply in the current month form 104 to 102 after being as high as 109 in January to start the year. Service sector sentiment has been steadily eroding. The climate indicator is in the 63 percentile of its range. The gauge of employment expected in the next three months is lower in the 58th percentile of its range.

The slip in the service sector is both steady and widespread. France is coming off a period when the service climate has been in the top 94th percentile of its range. But conditions in France have been deteriorating rapidly. Morale and activity gauges from other large EMU economies have been off peak. France itself is succumbing to these adverse pressures. French Finance Minister Christine Lagarde said Sunday that the Federal Reserve has a policy of very low interest rates and the ECB has kept interest rates elevated and that the differential in rates between the two is a little too big at the moment. This continues a policy of being obliquely critical of the tight ECB interest rate policy.

France INSEE Services Survey Jan 2000-date
  Apr-08 Mar-08 Feb-08 Jan-08 %tile Rank Max Min Range Mean
Climate Indicator 102 104 106 109 63.3 51 113 83 30 102
Climate: 3-Mos MAV 104 106 108 109 68.7 48 113 85 28 102
Climate: 12-Mos MAV 109 110 110 110 94.1 10 110 91 20 102
Outlook -3 -1 -1 2 61.3 55 9 -22 31 -1
Sales
Observed 3-Mos 9 17 13 13 69.0 28 18 -11 29 6
Expected 3-Mos 9 5 10 14 70.4 36 17 -10 27 7
Sales Price
Observed over 3-Mos 5 1 1 1 75.0 2 8 -4 12 0
Expected over 3-Mos 2 1 0 0 70.0 10 5 -5 10 0
Employment
Observed over 3-Mos 11 17 17 7 78.6 9 17 -11 28 4
Expected over 3-Mos 9 12 19 14 58.3 17 19 -5 24 5
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