Household morale weighed down by inflation and employment

Posted Sep 28, 2022, 10:17 AMUpdated on Sep 28, 2022 at 12:02

The morale of French households is at half mast. The indicator that measures the latter fell again in September, after an upturn in August. It shows a decline of three points, to 79, according to INSEE.

Consumer confidence is thus back to its July level, then at its lowest since June 2013. The indicator also remains well below its long-term average (100 between January 1987 and December 2021).

Financial concerns

If in August, the French were optimistic about inflation, their concerns have reappeared. The share of households believing that prices will accelerate over the next twelve months has rebounded by ten points.

In August, the one-year inflation rate, fueled by the war in Ukraine, reached 5.9%. It was then up 0.5% over one month. The statistics institute is due to publish a first estimate for the month of September on Friday.

Fears also relate to their future personal financial situation. The corresponding balance deteriorated by six points over one month, to -28. The share of households that consider it appropriate to save has risen by seven points compared to August.

However, they doubt their ability to do so. The balance of opinion regarding current savings capacity again lost one point. That relating to future savings capacity loses three.

Doubts about the evolution of employment

The concerns of the French are finally about employment, unlike in August. “The fears of households concerning the evolution of unemployment are increasing sharply”, details INSEE. The corresponding balance thus gains 11 points.

But in a context where employment is doing relatively well in France (unemployment rate of 7.4% in the second quarter according to INSEE), fears linked to unemployment remain “at a low level” compared to their average of long period.

In Germany, consumer sentiment continues to plunge

German consumer sentiment is expected to continue to slide in October, weighed down by unbridled inflation and the specter of a winter recession. The GFK barometer forecasts an index at -42.5 points, plunging 5.7 points from its September value, revised down to -36.8 points. The presidents of the regions (Länder) meet this Wednesday with government representatives to discuss additional aid to be put in place, due to the energy crisis, and its financing.

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