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French consumer morale worsens in December

Published 01/06/2009, 03:03 AM
Updated 01/06/2009, 03:05 AM

PARIS, Jan 6 (Reuters) - French consumer confidence sank in December as households worried about rising unemployment and future standards of living, data showed on Tuesday.

Morale worsened to -44 from an unrevised -43 in November, national statistics office INSEE said. The number was in line with the consensus forecast in a Reuters poll.

The report said concerns about the outlook for unemployment rose to 79 from 75 in November while confidence in current personal financial situations fell slightly to 11 from 12.

Headline unemployment has risen past 2 million as the economy has slowed and both the government and private analysts are expecting the jobless rate to continue to climb next year.

Consumer spending, which accounts for nearly two-thirds of gross domestic product, held up in November and Economy Minister Christine Lagarde has put a brave face on recent data.

"The indications we have for the month of December are generally favourable if you compare December 2008 with December 2007," she told Europe 1 radio.

But spending is expected to fall. An Ifop survey in the Journal du Dimanche newspaper on Sunday said that 69 percent of French households plan to cut their spending in 2009. It said the French were most likely to cut their spending on electronic goods, trips to restaurants and travel.

French President Nicolas Sarkozy unveiled a 26 billion stimulus package to boost the economy but it targeted business investment rather than putting money directly in consumers pockets.

The government has not ruled out another round of measures this year. (Reporting by Anna Willard, editing by Mike Peacock)

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