PARIS (Reuters) - French consumer confidence levels hit their highest since January 2018, data showed on Wednesday, as households grew more confident about spending after tax cuts earlier this year and fears over unemployment receded sharply.
The French data is a bright spot of economic news for a euro zone fighting recession and will help President Emmanuel Macron push his case for Germany to act sooner rather than later to revive its own faltering economy.
The INSEE national statistics office said its consumer confidence index for September rose for a ninth straight month to 104 from a revised 103 in August - the highest since it reached 105 points in January 2018. A Reuters poll of 13 economists had forecast 102 points for September.
The data showed that a raft of tax cuts and bonus schemes earlier this year for the poorest workers and pensioners worth more than 10 billion euros ($11 billion) was beginning to alter household spending trends.
The data showed a further increase in consumers considering it to be a good time to splurge on big-ticket items. But it also suggested households might be more inclined to squirrel away extra income rather than spend it. The survey showed a jump in their confidence over their ability to save in the future.
Concerns about unemployment fell sharply for a second consecutive month to their lowest since January 2018 as France’s labor market continues to see solid job creation.
The Organisation for Economic Cooperation and Development last week predicted French economic growth in 2020 would comfortably outpace German expansion, forecasting 1.2% growth in France and an anemic 0.6 percent in Germany.
While France’s economy has so far shrugged off the sharp slowdown of Europe’s biggest economy, Macron faces resistance on the streets to planned reforms to France’s costly pension and unemployment benefit systems.
In a further sweetener to households and companies, Finance Minister Bruno Le Maire is expected to unveil more tax cuts, with little sign of a tightening of the purse strings, when he presents his 2020 budget to parliament on Friday.
Reporting by Sudip Kar-Gupta and Richard Lough; Editing by Andrew Heavens and Jacqueline Wong