France’s consumer confidence declined for the first time in seven months during May, defying expectations for further improvement, as households turned pessimistic regarding their future saving capacity, survey data from the statistical office INSEE showed Wednesday.
The consumer confidence index dropped to 93 from 94 in April, which was the highest level in more than five years. The reading continued to remain below its long-term average of 100.
Economists had forecast the index to rise for a fourth straight month, taking the reading to 95, which would have been the highest since October 2007, when the score was 99.
Consumers’ assessment of their financial situation in the past 12 months deteriorated and the index fell to -27, the lowest since March 2012, from -25 in April. Their view on the future financial situation remained stable with the index holding steady at -13, the highest score since November 2010.
Households’ view on their current and future saving capacity declined sharply in May. The current saving capacity index declined to 6 from 17 and the measure for expected saving capacity dropped to -5 from 4.
French also likely postponed their major purchases as they turned more pessimistic regarding the same. The corresponding index fell to -14, the lowest reading since October 2009, from -11 in the previous month. Their view on their standard of living, both current and future, improved slightly.
Concerns that unemployment will rise in coming months also eased slightly in May, but the index at 58 continued to remain substantially above its long-term average.
The index for current inflation assessment declined to -57, the lowest since the start of the series in 1972. Households continue to expect prices to rise in coming months and the relevant index rose to -40 from -43.
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