Spending rose as budgets tightened
France’s real GDP was flat in the second quarter after shrinking 0.2 per cent in the first. Household consumption rose 0.3 per cent after a 0.3 per cent decline. Over the same period, purchasing power per consumption unit fell 0.6 per cent. Activity at the till and room in the household budget moved in opposite directions.[1]
Income failed to keep pace with prices. Household disposable income in current euros rose 0.5 per cent and aggregate wages received rose 0.3 per cent, while consumer prices increased 1.0 per cent. The purchasing power of disposable income fell 0.5 per cent and the saving rate slipped from 17.9 per cent to 17.2 per cent. Consumption recovered while real income and the saving buffer narrowed.[1]
The age split in payrolls
Payroll employment fell 0.1 per cent in the same quarter, a loss of 23,500 jobs; the annual decline was 0.3 per cent, or 72,500 jobs. The private sector lost 24,300 positions while the public sector added just 800. That extended the year-on-year decline in private payrolls to a sixth consecutive quarter.[2]
The distribution sharpens by age: among workers aged 15-29, private payroll employment fell 0.3 per cent; among those aged 30-54, it fell 0.3 per cent; for people aged 55 and over, it rose 0.6 per cent. An experimental estimate put non-salaried employment up 0.9 per cent, leaving total employment flat. The mix suggests younger and middle-aged employees faced pressure through the labour market as purchasing power weakened. Demographic change and later revisions to the experimental estimate could narrow that divide. Even so, the second-quarter spending gain came with a lower saving rate and a weaker payroll base.[2], [1]