Consumer spending in France, the euro zone's second-biggest economy, dipped in November as shoppers splashed out on cars but cut back elsewhere as job market fears weighed on sentiment. National statistics office INSEE said consumer spending on manufactured goods fell by 0.1 percent in November, below expectations for a reading of 0.0 percent.
The fall followed a downwardly revised increase of 1.0 percent in October and a rise of 2.6 percent in September. "Overall it's a sign of worsening conditions in the labour market - slowing wage growth will come to the fore and consumers will become increasingly reluctant to spend going forward," said Joost Beaumont, an economist with Fortis.
"That was reflected slightly in textiles and manufactured goods. This is payback for strong rises in previous months, and overall it signals weak consumer spending in the coming months." The slight fall in consumer spending was partially driven by a 1.8 percent decline in the purchase of leather and textile goods and a fall in appetite for watches and jewellery.
However, car sales did well, rising 4.2 percent due to consumer eagerness to take advantage of the government's cash for car scrappage scheme before it draws to a close on January 1. France's consumer spending data covers only manufactured goods and represents almost a quarter of total consumption. Analysts expect household spending on manufactured goods to wane further in the coming months as job worries mount.
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