French consumer confidence falls

Consumer spending, which accounts for 15 percent of the French economy, has fallen by 0.4 percent in the last month, as well as manufacturing goods falling for the fourth consecutive month, according to the National Statistics Office.

With the labour market struggling and likely to continue to deteriorate, it seems as though consumer confidence and consumer spending is only heading in one direction.

The world’s largest cosmetics manufacturer L’Oreal SA has announced cuts in both sales and profit forecasts for the third time in just four months, as both European and US demand has fallen further than expected.

The French economy had narrowly avoided a recession in the previous quarter, however now that consumers are being even more tight-fisted, the jobless claims are increasing and government action is desperately needed more than ever.

With growth of just 0.1 percent being expected for 2008 and recession looming by early 2009, it seems as though greater input is needed in order to stimulate the economy into action.

French President Sarkozy announced last month that 100,000 government- subsidised jobs would be planned for the beginning of next year, as well as a 360 billion euro bailout of the nation’s financial institutions.

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