Wary French consumers slash spending

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Wary French consumers slash spending

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French consumers cut back sharply on spending in March as unemployment hit its highest level in over 13 years.

Consumer spending dropped 2.9 percent in March compared with February according to the statistics office INSEE.

That wiped out the gains of the previous month when cold weather spurred spending on energy and clothing.

That puts more pressure on President Nicolas Sarkozy as he tries to defend his economic record ahead of the final round of the presidential election on 6 May.

Coming in the wake of March unemployment figures, which showed jobless numbers rose for a tenth straight month to their highest level since September 1999, it added to the sense the eurozone’s second largest economy is bumping along the bottom.

The underlying picture was one of consumers keeping tight control of spending amid high unemployment, and as they wait for the outcome of the presidential election to see what tax rises or spending cuts they can expect in the months ahead.

Household goods purchases edged up 0.2 percent month-on-month, as did other manufactured goods, while food fell 2.3 percent over the period.

One positive surprise was the 2.3 percent rise in vehicle purchases, which followed falls in both January and February.