French Consumer Confidence Hits Highest Level Since Macron Took Office
French consumer sentiment rose unexpectedly in November to its highest level since the start of Emmanuel Macron's presidency as unemployment concerns receded, official data showed on Wednesday.
The INSEE official statistics survey said its household confidence index rose to 106 from 104 in October, smashing economists' expectations for a pull-back to 103 in a Reuters poll.
That brought the index to its highest level since surging to a 10-year high of 108 in June 2017 following Macron's election the previous month on promises to modernise the economy with a pro-business reform agenda.
INSEE said that households' concerns about unemployment fell in November to the lowest point since August 2017 and their general economic outlook was the best since January 2018.
A Surprise Improvement
The improvement is all the more surprising as public sector unions are set for a major strike from 5 December against Macron's planned pension reform. The most hardline unions want to shut down the economy until the former investment banker scraps the reform.
A year ago, consumer confidence collapsed amid weekly "yellow vest" protests, many of them violent, against Macron's perceived elitism and fuel tax hikes that demonstrators said were destroying their purchasing power.
Macron responded with a package of concessions offering tax relief to poor workers and pensioners worth more than €10 billion ($11 billion).
"What a difference a year makes," HSBC economist Olivier Vigna said in a research note.
The measures have turned out to be particularly well timed, giving the euro zone's second-biggest economy a boost at a time when other countries such as more export-dependent Germany are struggling in the absence of equivalent economic stimulus.
France's relative resilience has allowed the economy to keep creating new jobs despite the slower global outlook, although the unemployment rose marginally to 8.6% in the third quarter.
"With March 2020 local elections approaching, we continue to anticipate a contrast between economic figures, which underline France's recent economic resilience, and social/political issues, where tensions pose downside risks to the outlook," Vigna said.