ORIGINAL FRENCH ARTICLE: Pouvoir d’achat en berne pour les fêtes
by Nicolas Dutent
Translated Sunday 5 January 2014, by
French people’s purchasing power fell by another 0.1%, and they drew on their savings, according to figures published December 24 by the INSEE.
The brakes have again been slapped onto household purchasing power, which in terms of gross available income fell by 0.1% over the last period. The culprit is an accelerated rise in consumer prices this quarter, put at 0.2%, which comes on top of a “redirection of the wages” paid by non-financial companies. The rise in property and income taxes, which jumped by 1.9%, also played a role in this drop, “partly due to the effect of the measures imposed by the 2013 government finance law,” including “not taking inflation into account in calculating income tax, the creation of a tax bracket paying 45%, and the lowering of the ceiling on non-taxable family income.” At the individual level (a consumption unit), the purchasing power of wages and salaries fell by 0.2%
To compensate for this, French people drew more on their savings, as attested to by November’s net fall in funds deposited in Livret A savings accounts, the third consecutive monthly fall. Thus the rate of savings fell to 15.7%, as against 15.9% in the second quarter. It comes as no surprise that consumer expenditures also fell by 0.3% compared to the previous figures.
In line with this trend, the INSEE (the French statistical bureau) noted that while French household consumption of goods bounced up 1.4% in November, “the rise is mainly due to the jump in energy expenditures” (7.5% compared to a mild October’s expenditures). Consumption of durable goods fell slightly (0.3%), due to falls in automotive expenses (0.4%) and in home furnishings (0.3%).
On the other hand, things were looking up for manufactured goods thanks to a rise in spending on clothing, textiles and leather, which increased 3.3% due to purchases of winter clothing. Except for this clothing item, households are continuing to tighten their belts.