Less worried about inflation, the French fear a rise in unemployment

2023-11-28 15:05:52

Published on Nov. 28, 2023 at 12:36 p.m. Updated on Nov. 28, 2023 at 2:05 p.m.

Does the easing of inflation bring some comfort to the hearts of the French? In November, the household confidence indicator climbed 3 points to reach 87, a level it had not reached since April 2022, according to the INSEE survey published this Tuesday. It still remains “well below its long-term average”, however, underlines the Statistical Institute.

We will have to wait until Thursday to find out if the pace of price increases has continued to slow down in recent weeks. In October, inflation in France fell to 4% year-on-year, compared to 4.9% a month earlier. Even if prices remain high, the waltz of labels in the food aisles has finally been stopped.

Precautionary savings

Today, the French seem ready to believe the message repeated over and over by the Minister of the Economy, Bruno Le Maire: “We are emerging from the inflationary crisis. » In any case, fewer of them consider that prices will accelerate in the coming months.

Even if their morale is still low, the French are in this context a little more optimistic about the evolution of their financial situation. They also believe that their standard of living will improve in 2024. No doubt invigorated by these positive prospects, they are starting to consider major purchases again while remaining cautious – this indicator gains 4 points but remains “significantly” below its average long period.

In these more uncertain times when economic activity is slowing and business failures are increasing, the French who already save nearly 19% of their income especially consider it appropriate to fill their nest egg more. Which does not bode well for consumption, the traditional pillar of growth in France.

But another factor is now undermining household morale. Faced with the rebound in the unemployment rate this summer, from 7.2% to 7.4% of the active population, doubt is setting in regarding the evolution of the labor market. Fears regarding the evolution of unemployment, which had almost disappeared after the Covid pandemic, rose sharply again in November (+8 points). While business leaders seem less ready to recruit, this feeling is likely to be reinforced over the coming months.