French household spending dropped slightly in August, with different reports estimating the decline at 0.4% or 0.5%. The decrease was mainly due to lower spending on energy and food, two essential categories for most households. Energy consumption fell by 2.3% in August, reversing a 0.9% increase from July. This drop came despite rising prices for fuel, which added pressure on consumers' budgets. Food spending also decreased by 0.4% after a small rise of 0.2% in July, with purchases of dairy products, beverages, and tobacco all declining following a peak in July.
In contrast, spending on manufactured goods continued to grow, rising by 0.3% in August, following a 0.4% increase in July. Car purchases remained strong, with durable goods consumption up by 0.3% in August, supported by a notable rise in transport equipment, including new vehicles. However, spending on housing equipment fell by 0.3% in August, following a 2.7% drop in July. Other areas showed more modest improvements, with clothing and textile purchases rising by 0.3% and "other manufactured goods" increasing by 0.2%, similar to the previous month.
Over the three months ending in August, overall spending on goods increased by 1.0% compared to the previous three months. Year-on-year, household consumption was up by 0.8%, largely due to the continued strength of manufactured goods. Meanwhile, consumer prices rose by 3% year-on-year in September, up from 2.4% in August, driven once again by rising energy costs. These figures suggest that pressures on household spending are likely to increase further in the September data, as higher prices continue to impact consumers' purchasing power.
French Household Consumption Falls in August Amid Rising Prices
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