Household consumption stalled in 2011

Real French household consumption growth decelerated from 1.4% in 2010 to 0.3% in 2011, thus making only a modest contribution to the 1.7% growth in GDP. Households are saving more despite the slowdown in purchasing-power gains from 0.9% to 0.5%. The acceleration in price growth from 1.1% to 2.1%-driven by higher prices for energy and certain food products-more than offset the rise in household income, particularly earned income. The slackness of consumption is largely due to the exceptionally mild weather in 2011, which caused households to reduce their heating expenditures. The growth in consumption of other goods and services, particularly telecommunications, also eased. Nevertheless, sales of computers and cell phones continue to stimulate the information economy. Consumption of new motor vehicles declined less sharply than in 2010, whereas that of transport services accelerated.