French Household Confidence Edges Up

French household confidence edged up to 104.4 in February from 103.7 in January. The index is moderately strong at that level with a percentile queue standing of 74.5%. Still, the status of the index and its momentum is unclear since the index has made a steep improvement after a steep decline and now it is leveling off it appears to be poised on brink of renewed erosion despite the month’s gain.

Living standards over the past and future 12-months both have been on an improving run. But living standards over the past 12-months currently have a percentile standings well above that expected over the next 12-months.

The expected unemployment rate is low and has fallen to the lower ten percentile of its queue of historic values.

The household sector sees little change in price assessments recently. Inflation expectations rose into late 2018 and have since subsided. Still, the rank standings show past inflation trends to have a much more moderate queue standing that expectations for the next 12 months that see a ranking of 72% compared to 33% on past trends.

Savings assessments show a weak environment in each to achieve savings contrasted with a strong reading on the ability to save expected over the next 12-months.

Households’ spending assessments for major purchases are being downgraded after being cut sharply then bouncing back. Since the spring-back assessments for spending have been weakening, however. The current standing at a 76.5 percentile is solid but it is fading.

The financial situation has been improving after bottoming in late 2018. Both the assessments of the past and future financial situations have been getting better. However, the past assessment at an 83 percentile standing is much stronger than the 12-month ahead assessment which stands at a 54 percentile standing barley above its historic median.

On balance the French households are showing a certain stability in their assessments and outlooks. But household assessments have been though some turbulence. After their drop and recovery they are on firmer footing but there still seems to be new erosion in their perception of conditions. As with anything these days what happens going ahead is going to depend on the evolution of events we can’t begin to fathom. This refers – most pressingly- to the evolution of the coronavirus, Brexit the US-China trade deal and the simple economic impact of all of those things. We are entering unfamiliar territory where the unknown is beginning to dominate the known.