PARIS (Reuters) - The French economy maintained a steady cruising speed in the third quarter as consumer spending picked up on strong purchasing power growth, official data showed on Friday.
The euro zone’s second-biggest economy grew 0.3% in the July-September period, marking the third quarter in a row of expansion at that rate, the national INSEE statistics agency said, confirming a preliminary estimate.
Consumer spending, traditionally the motor of the French economy, picked up to grow at a rate of 0.4% after 0.2% in the previous quarter, INSEE said.
With inflation low and wage growth strong, households’ real disposable incomes rose 0.6% after slipping 0.2% in the previous quarter in the wake of special bonuses many workers received at the start of the year.
As incomes rose faster than spending, the household savings rate also grew, edging up to 14.8% from 14.6% in the second quarter.
French consumers have benefited this year from a package worth more than 10 billion euros (8.57 billion pounds) of tax relief for poor workers and pensioners that President Emmanuel Macron rolled out in the face of a series of protests against his government.
The package has proven particularly well-timed, offering the economy support at a time when more export-dependent countries like regional powerhouse Germany are struggling.
INSEE said that higher wages ate into corporate margins, which fell to 32.4% from 32.7% in the previous quarter. Nonetheless, firms increased business investment, which rose by 1.4% - the strongest rate in a year.
Separately, INSEE said that French consumer prices rose 0.1% in November, giving a 12-month rate of 1.2%, which beat forecasts on average for 1.1% and was the fastest rate since August.
Reporting by Leigh Thomas; Editing by Kenneth Maxwell