November 29, 2018 / 7:55 AM / a year ago

French consumer spending recovered in October

FILE PHOTO: Customers carry shopping bags with purchases outside a department store in Paris, France, February 26, 2016. REUTERS/Charles Platiau

PARIS (Reuters) - French consumer spending picked up in October from the previous month, according to the INSEE statistics office, offering some relief from data showing sluggish growth and weak confidence in the euro zone’s second-biggest economy.

INSEE said consumer spending in October had risen 0.8 percent from September, exceeding an average forecast of a 0.5 percent rise in a Reuters poll of 17 economists. FRGPC=ECI

INSEE also confirmed that France’s gross domestic product had risen 0.4 percent in the third quarter, in line with a preliminary estimate.

French President Emmanuel Macron won elections in May 2017 on promises to modernise the economy, but voters are becoming impatient to see the benefits.

In recent weeks there have been nationwide protests against tax increases for diesel, which many consumers blame for reducing their spending power, while rising oil prices and concerns over Italy’s economy have also dented morale.

Demonstrators in fluorescent jackets, dubbed the “yellow vests” protesters, have blocked highways across France since Nov. 17, and a rally in Paris last weekend led to violent clashes on the Champs Elysees.

The October consumer spending data did not factor in those November protests, and data from INSEE this week showed consumer confidence fell in November to its lowest since February 2015.

“In general business activity across the EU has slowed to the worst growth rate since 2014 and France is not immune to this slowdown, even though services growth in France is performing better than manufacturing,” said Lorne Baring, managing director at Geneva-based investment firm B Capital.

For full details and data from INSEE: here

Reporting by Sudip Kar-Gupta; Editing by Robin Pomeroy

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