Thursday, 20 January, 2022

Household morale in France rebounds in January

The household confidence index in France rebounded in January after its decline in December, with households regaining a bit of optimism for their future financial situation, INSEE said on Wednesday.

The indicator, calculated on the basis of balances of opinion (differences between the proportion of positive and negative responses), rose to 104, two points more than in December, and remains above its long-term average ( 100), said the statistical institute.

In January, households were more optimistic about their future financial situation, up 4 points, after falling 5 points in December.

The proportion of households believing that it is opportune to make major purchases also rose slightly (+1 point) and fears concerning the evolution of unemployment were stable in January, after the sharp rise in December, notes INSEE.

In addition, the balance of opinion of households on their future savings capacity increased by 2 points, but the share of households judging that it was appropriate for them to save fell in January (-2 points).

On the other hand, households are a little more pessimistic about the future standard of living in France, with a balance down by one point, which remains below its long-term average.

Economists and the government scrutinize household morale because it is an important element in assessing the future level of consumption in France, the main engine of economic growth.

Despite the increase in purchasing power last year, due to measures taken by the government in response to the movement of “yellow vests”, households have so far preferred to save than to consume.

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