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Economy in Brief

French Consumer Confidence Heads Back to Cycle/All-time Low
by Robert Brusca October 28. 2008

French VS German Consumers - Germans are acting more stoically in this period, but French consumers are admitting to really feeling a pinch. The German look-ahead survey for November from GFK found a slight pick up – very slight – in German consumer confidence. French consumers could not match this resilience. The French figures are more conventional for October instead of leaping ahead to November as with Germany’s GfK poll. They show a relatively sharp slip to -47 in the French INSEE Climate index from -44 in September. This matches the all-time low (since 1990) and the low reached in July of this year. Placed in their respective ranges for percentile standings the French readings are uniformly low or much worse than that.

Living standards…or sub-standards. Past and next 12 months living standards are about the weakest ever seen. Unemployment prospects are at the top FOUR percent of their historic range and have escalated sharply and steadily July to August to Sept to Oct.

Inflation and spending plans. Expected prices developments show inflation pressures and expectations for inflation are cooling. Saving or the ability to save is rated very low by the responding French households. The spending climate is in the bottom five percent of its range but has eroded very little in the past four months.

And…the financial situation is…The current financial situation is rated as a bottom 30% environment with the past rated as a bottom 12% environment and the future 12 months rated as a bottom 3% environment. That is not good news.

INSEE Household Monthly Survey
          Since Jan 1990 Since Jan 1990
  Oct
08
Sep
08
Aug
08
Jul
08
Prcntile Rank Max Min Range Mean
Household Confidence -47 -44 -46 -47 0.0 225 10 -47 57 -18
Living Standards
Past 12 months -82 -80 -81 -82 0.0 225 18 -82 100 -38
Next 12 months -59 -50 -55 -60 1.3 225 15 -60 75 -20
Unemployment: Next 12 69 52 45 39 96.4 5 73 -37 110 30
Price Developments
Past 12 months 36 44 52 60 76.9 11 64 -57 121 -16
Next 12 months -38 -53 -41 -30 24.2 129 31 -60 91 -34
Savings
Favorable to save -7 16 17 17 0.0 226 40 -7 47 23
Ability to save Next 12 months -22 -16 -19 -20 3.4 225 6 -23 29 -9
Spending
Favorable for major purchase -39 -37 -38 -38 5.2 225 16 -42 58 -13
Financial Situation
Current 8 8 7 7 23.8 172 24 3 21 12
Past 12 months -32 -34 -35 -36 12.9 221 -5 -36 31 -17
Next 12 months -22 -18 -20 -21 2.9 225 11 -23 34 -1
Number of observations in the period: 226
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