The French are hopeful for the next twelve months, according to the latest INSEE study, encouraged by the economic recovery and declining unemployment.
The French are hopeful for the next twelve months, according to the latest INSEE study, encouraged by the economic recovery and declining unemployment. However, rising energy prices, along with wider inflationary pressures, are generating problems.
With the start of the school year, the French have regained their optimism. According to the latest INSEE poll released on Tuesday, household morale began to increase again in September after dipping slightly in August. This month, the synthetic indicator of household confidence rose three points to 102, putting it back over its long-term average (a level of 100 points corresponding to the average of the surveys carried out between 1987 and 2020 ).
According to the latest reports on the front lines of the Covid-19 pandemic, this synthetic index has made a surge in recent months. It had remained below 100 points between January and May, until rising over it in June (103 points), towards the end of the third containment put in place to slow down a fresh wave of contamination. It stayed over 100 points in July until decreasing to 99 points in August, when there was discussion of a Delta variant epidemic.
As a result, September is a good time to be optimistic. The percentage of families that believe that the standard of living in France has improved in the last year is steadily rising. Seven points are awarded to the matching balance. Similarly, the number of families that believe that the standard of living in France will increase in the coming year is steadily rising. According to INSEE, "the equivalent balance improves eleven points and returns above its long-term average."
Furthermore, concerns about employment appear to be dissipating. This month, the equivalent balance falls thirteen points. According to the latest figures released by the Ministry of Labor on Monday, the number of job searchers in category A decreased by 1.4 percent in August compared to July.
The French are likewise confident about their economic condition. “In September, the household balance of view on their future financial condition improved by one point. That is steady in relation to their previous personal financial situation. INSEE says, "These two balances remain above their long-term average."
The French, while confident in their financial situation, are less so when it comes to making large plans. As a result, the percentage of families that feel now is a favorable time to make large purchases is lower this month. According to the institution, “the corresponding balance drops three points but stays over its average.”
On the savings front, the French are likewise more confident, with the household balance of opinion on future saves capacity recovering three points. On the other hand, they consider their existing savings capacity (-1 point), as well as the potential to save, to be less significant (-1 point). As a reminder, the French savings rate rose amid the health-care crisis. The total sum outstanding on the two most popular passbooks, the Livret A and the Livret de développement durable et solidaire, currently stands at 472.4 billion euros, according to the latest data from the Caisse des Dépôts.
The one drawback, and it's a big one: inflation. In September, the percentage of households who believe prices have risen in the past year grew somewhat (+4 points). "Households who believe prices will rise in the next 12 months are somewhat more numerous in September," according to INSEE, with the equivalent balance rising two points.
This inflationary rise affects all industries, but particularly the energy industry. The cost of gasoline, as well as electricity and gas, is increasing. The Energy Regulatory Commission (CRE) stated on Monday that regulated gas prices will increase by 12.6 percent beginning October 1st. On Tuesday, the Minister of the Economy, Bruno Le Maire, told Cnews that the price hike will most likely last a few months. After paying a 100-euro energy check to six million people in December and another 150-euro check next spring, the government says it is aware of the situation and is working on further steps to mitigate its impact on households.
Source: LesEchos