French hit the shops again

French shoppers were out in force in June

French consumer spending surged 1.5% higher in June compared with May, reversing declines in the previous two months.

And the index was 2.7% higher than the previous year.

French consumer spending, June 2001

retail sector +1.5%

cars +2%

textiles +4.6%

total +1.5%

The rebound was way ahead of the 0.6% increase in a poll of economists ahead of the news.

A rush of shopping for new clothes and cars helped buoy the rises.

The surge offers hope that the sturdy domestic demand will help the eurozone's second largest economy weather the global economic downturn.

In Europe, Germany is now being hardest hit by the deepening slowdown in the US and Japan.

Demand for clothes and cars

In France spending on manufactured goods was boosted by a strong rebound in car sales.

Spending on cars rose 2% in June after a fall of 0.7% in May.

And the traditional summer clothes sales, together with good weather, boosted textile sales by 4.6% in June after a slide of 1.2% in May.

But some analysts were cautious of reading too much economic optimism into the data.

"The textiles figure is always volatile. But, basically, French households had nothing left to wear and went out to buy again," said Stephane Deo, an economist at UBS Warburg in Paris.