The French went bargain-hunting big-time when discount sales opened in January, driving national consumer spending up 2.0 percent to the relief of shopowners, with a leap of nearly 10 percent in clothes sales. In a report published on Tuesday, national statistics office INSEE announced a 2.0 percent rise in spending versus both the month of December and January of last year. The average forecast among economists polled by was for a rise of around 0.5 percent. INSEE, trimmed its previous December readout, however, to 0.0 from a rise of 0.2 percent. INSEE highlighted a "marked increase" in overall household spending. Its figures showed people had spent heavily on clothes in particular, where spending rose 9.5 percent versus December, after a drop of almost as much in November-December.
NOT SO FAST
"It's a good start but we always need to remember that these figures are volatile," Laure Maillard, an economist at CDC Ixis bank said. Emmanuel Ferry, an economist at Exane investment brokers, also cautioned against reading too much into the January bounce. "January does not herald a rebound because French economic fundamentals are still bad, namely employment, public finances, budget policies and inflation. Spending is offering minimal support to growth," he said. Car sales were the big blackspot, falling 4.5 percent in January in line with news coming from the automobile industry of a serious downturn in the French market as well as in Europe generally. Discounts ran as high as 70 percent in this year's Winter discount sales, which opened on January 7 and lasted for four or six weeks depending on the region. The news from France, the second largest economy in the euro zone, appeared to confirm what people in the retail trade had hoped for -- a respectable rebound in purchases after a miserable November and dubious December. With regional elections scheduled in March, INSEE's report may offer some comfort to a government desperate for visible proof that the heart of the economy is starting to beat again after almost halting last year with a heavy toll on employment. Large city centre shops and department stores racked up a rise of 3.0 to 3.5 percent in normal turnover levels this January, according to Jacques Perilliat, head of their main federation, the UCV, or Union du Grand commerce de centre-ville.
The winter sales period in general accounts for around 13 percent of total annual department store sale in France, according to the Finance Ministry. Speaking after the sales period closed earlier this month, Perilliat said "there's a recovery since mid-December". Other economic pointers expected later on Tuesday morning from key economies of the 12-nation euro zone were a report on December retail sales in Italy and Germany's closely watched Ifo business climate index for February.//