World Economic outlook - French consumer prices index (CPI) January 2012 : French consumer prices fell in January from a month earlier, mostly due to seasonal sales which helped offset higher energy prices, according to data released Wednesday by France's national statistics office Insee.
In January, the consumer price index dropped 0.4% from December and was up 2.3% from a year earlier, Insee said. The data compare with forecasts for the index to be stable on the month and up 2.7% from a year earlier, according to a Dow Jones Newswires survey of economists.
The better-than-expected figures are expected to give a much needed boost to consumer spending. The purchasing of goods and services by French households--which represents over half of the country's gross domestic product--was weak throughout last year, and 0.5% lower in 2011 than in 2010, when it rose 1.4%.
"The positive aspect of this inflation figure is obviously that wage earners' purchasing power has stopped declining, which should be less negative for future private consumption," said Dominique Barbet, a Paris-based economist at BNP Paribas.
The price index for clothes and shoes dropped 10.9% over the month and was down 0.3% on the year, while manufactured product prices were down 1.9% on the month and up 0.6% on the year. By contrast, energy prices were up 2.4% on the month and 7.9% on the year, while oil products prices were up 3.0% on the month and 9.8% on the year.
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