France: Consumer spending continued to improve in May – ING

According to Julien Manceaux, senior economist at ING, French consumers are slowly heading back to the shops as consumer spending on goods increased in May by 0.4% month-on-month after 0.3% in April.

Key Quotes

“Yearly growth figures are now back in positive territory after several negative months during the “yellow vest” crisis. The improvement in May is broad-based but is supported by the transport segment, as the car market is recovering from last summer’s shock (new CO2 emission rules). Other durable goods also saw an increase in spending, in line with the recent recovery in big purchase intentions measured in consumer surveys.”

“An improving labour market, together with a boost in purchasing power from tax cuts and higher wages, is pushing consumers back into stores, which should support private consumption growth in the second half of the year and in 2020.”

“Looking at the first quarter figures, it seems that domestic demand will still need some time to recover from the abnormal levels of anxiety recorded at the turn of the year in consumer surveys.”