May 31, 2012 / 9:16 AM / 8 years ago

UPDATE 1-French consumer spending surprises with bounce

By Daniel Flynn

PARIS, May 31 (Reuters) - French consumer spending rebounded more strongly than expected in April despite rising unemployment, as higher energy spending due to unseasonably cold weather more than compensated for a decline in manufacturing output.

With France’s jobless rate at a near 13-year high and rising, analysts say that household spending - the motor of France’s 2 trillion euro economy - was still likely to cool in the coming months.

But national statistics agency INSEE said that consumer spending in April rose by 0.6 percent month-on-month, topping the average forecast in a Reuters poll of 17 analysts for a 0.3 percent rise.

March’s figure was also revised up slightly to a 2.6 percent fall, versus the initial reading of 2.9 percent, INSEE said.

“Today’s data flag a firmer-than-expected performance of household spending at the beginning of the second quarter,” Unicredit analyst Tullia Bucco wrote.

“Nevertheless, we expect that private consumption will remain subdued in the quarter, reflecting a moderate slowdown in household disposable income growth as weak labor market conditions will weigh on salaries while fiscal tightening will also take its toll.”

Energy spending, which accounts for 16 percent of consumer expenditure, leapt by 10.2 percent month-on-month after an 11.8 percent plunge during an exceptionally warm March.

The decline of spending on manufactured goods in contrast accelerated to 1.3 percent month-on-month after falling 0.5 percent in March.

Spending on cars slipped 2.0 percent after rising 2.8 percent in March, while clothing sales slumped 8.2 percent month-on-month, versus a 0.3 percent fall the previous month.

Data on Wednesday showed that France had more jobseekers in April than at any time this century as numbers rose for the twelfth month running, and the labour ministry said it was braced for more layoffs in the months ahead.

In a stark illustration of the economic challenges facing new President Francois Hollande, figures on Wednesday showed registered jobless in mainland France rose by 4,500 to 2.89 million, up 0.1 percent from March and the highest since September 1999.

France, the euro zone’s second largest economy, posted zero growth in the first quarter as consumption stalled, exports slowed and business cut back their investment.

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