By BridgeNews Paris--Jan. 4--French consumer confidence surged unexpectedly to a record high in December as oil prices fell and optimism rose over future living standards and unemployment. A government-compiled index put confidence at +3, compared with -3 in November. The index has been in negative territory since September. Analysts had expected the index to rebound, but only to an average of -2. "The oil shock, which has weighed on purchasing power and finally on consumption, seems to have been temporary and has not broken the virtuous domestic cycle," said Marie-Pierre Ripert, euro-zone economist at CDC-Marches Research Department. "These figures support our scenario of a recovery in consumer spending in 2001." The index has registered negative readings since its inception in 1997, but broke into positive territory between April and July for the first time amid signs of a robust economy. The rise was cut short in September as the surge in oil costs dented morale and caused consumers to pull back on spending. The jobless rate--a key to French household confidence--has started to show a downward trend since then, hitting its lowest level in more than 10 years in November. A sharp reduction in concerns about the outlook for unemployment boosted the December index. This component hit -29 after a reading of -22 the prior month, amid news that further downward progress was being made on France's jobless rate. Unlike the rest of the index, for the unemployment component a larger positive balance signals increasing fears of joblessness. The outlook for the inflation environment improved significantly alongside the decline in oil costs, with this component hitting -37 following a revised -29 reading in November. On inflation a larger negative balance indicates easing inflation expectations. This was a marked contrast to views about the immediate past inflation picture, which hit -40 after a -33 in November. The combination of these factors appears to have made consumers much less worried about their future standards of living. This component of the index rebounded to +9 from -4. They also were more optimistic about the future capacity to save, with this component rising to -8 from -16. Households also indicated they believe opportunities to make purchases in the future have strengthened, as has their capacity to save money. "With declining oil prices, forthcoming tax cuts and a still healthy job market, prospects for household confidence and private consumption remain very positive," said Marc Hendriks, chief economist at Societe Generale Economic Research.