Household consumption dipped but held firm in 2008

Georges Consalès, division Synthèses des biens et services, Insee

French household consumption expenditures slowed significantly but held firm in 2008, their real growth easing from 2.4% to 1.0%. Price growth quickened from 2.1% to 2.8%, driven by the sharp rise in food and energy prices. As a result, real income (i.e., purchasing power) increased more slowly than in 2007, dampening consumption. To preserve their consumption expenditures, households reduced their saving rate slightly. The spending slowdown affected most goods and services—even in the previously fast-growing information-technology categories. Motor-vehicle purchases weakened in real terms (i.e., adjusted for inflation). Buyers showed a stronger preference for smaller, less expensive models, encouraged by the early-2008 introduction of a bonus for the purchase of low-CO2-emitting vehicles.French household consumption expenditures slowed significantly but held firm in 2008, their real growth easing from 2.4% to 1.0%. Price growth quickened from 2.1% to 2.8%, driven by the sharp rise in food and energy prices. As a result, real income (i.e., purchasing power) increased more slowly than in 2007, dampening consumption. To preserve their consumption expenditures, households reduced their saving rate slightly. The spending slowdown affected most goods and services—even in the previously fast-growing information-technology categories. Motor-vehicle purchases weakened in real terms (i.e., adjusted for inflation). Buyers showed a stronger preference for smaller, less expensive models, encouraged by the early-2008 introduction of a bonus for the purchase of low-CO2-emitting vehicles.

Insee Première
No 1241
Paru le : 11/06/2009