French consumer spending unexpectedly surged in February, surpassing a peak reached five years ago before the euro zone debt crisis hit and a sign of brisk growth in the bloc's second-biggest economy at the start of the year. Consumer spending, the traditional engine of the 2 trillion euro economy, rose 0.6 percent in February, official data showed, confounding expectations of all the economists polled by Reuters who had pencilled in a flat reading on average.
The increase pushed the volumes of goods purchased by French consumers to a new all-time high, beating a previous record reached in February 2011, the INSEE statistics office said. Last month's increase comes after January spending was revised up to show a rise of 1.0 percent instead of 0.6 percent, while consumer spending was also stronger in December, at 1.1 percent, than the 1.0 percent previously reported, INSEE said.
The February increase was driven by a 1.5 percent jump in food products purchases, especially meat and drinks, INSEE said, and a 1.1 percent rise in spending on durable goods such as home equipment and mass-market electronics products. Consumer spending on goods accounts for almost half of total consumer spending, which in turn contributes to more than half of France's gross domestic product (GDP). Coming after a strong increase in industrial output in January, the data bodes well for French growth in the first quarter.
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