France's softening household consumption

In France, household consumption boosted by a combination of lower oil prices and low inflation, was the main growth driver in Q1. Consumption might be starting to ease, and will continue to ease over the coming months, on the back of increasing oil prices and recovering inflation.

"The French National Statistical Institute (INSEE) to report that consumer spending on goods decreased by 0.4% mom in May (1.3% yoy). The carry-over for Q2  points to a contraction of 0.6% in household consumption", expects Societe Generale.

The softening May consumption stems from the non-energy component, which they estimate to have dropped by 0.5% mom. The upcoming summer sales, starting at the end of June, are likely to have fed through as consumers postpone their purchases.