Source:Insee

26 JULY 2011

Consumer Confidence climbed three points to 86, as households finances took a breather due to the Summer sales period effective from June 30th and for five weeks, one week ahead of schedule, while in parallel, households regained assurance also translated optimism brought about by the summer vacations.  

Consequently, the households personal financial situation over the past 12 months index moved up three points to -28 and despite renewed food price inflation as well as recurrent consumer price increases effective from the beginning of the month each year (transport, rent, residential electricity prices, and postal services). The price trend over the past 12 months index rose only one point while over the next 12 months, households awareness of recent crude oil price declines pushed down the inflation gauge by four points to -18 even if current retail gasoline prices failed to reflect -8% Brent crude oil price drop.

Over the next 12 months, and regarding their personal financial situation,  households nevertheless stayed prudent as the index fell only two points to -19, and stagnated anew around the -20 point estimate. On their current savings capacity, households therefore kept the index at a new high 20 points, a seven point leap compared with the previous month and nine points above a long term average 11 points.

Over the next 12 months, households therefore applied a similar logic and pushed up the index by four point to -12,as a sign of temporary relief due to the summer period rather than actual financial improvement. The opportunity to save index thus fell back two points to 25 while the opportunity to make significant purchases climbed four points to -21.

On their standard of living over the next 12 months, households appreciation reflected stagnation as the index rose one point to -66 while over the next 12 months, households « holiday mood » pushed up the index three points to -44, a substantial 12-point improvement compared with April, but still over two fold the long term average.  Concerns over unemployment nevertheless remained due to the latest unemployment figures surge, likely to rise again especially for youth, and amid the current Euro area debt concerns brought about by the Greek crisis, taking the index to leap ten points to 43.