Household consumption expenditure fell sharply in October

Faced with inflation, households continue to tighten their belts. This Thursday, INSEE published a worrying estimate of consumer spending on goods last month: this fell by 0.9% in October over one month, after a period of stability in September. Furthermore, the change in spending on goods for September is revised downward by 0.2 points to 0.0% by the National Institute of Statistics.

Over one year, consumer spending on goods fell by 1.3%, and by 0.5% over the quarter, and that on manufactured goods by 1.8% and 0.4% respectively. Household consumption expenditure represents more than half of gross domestic product (GDP). Food consumption fell by 1.5% after 1.2% in September, and energy consumption is down sharply (-2.5% after -1.3%). Food purchases are notably down sharply for drinks, agricultural products, rice and flour, as well as processed fish. Tobacco consumption fell (-1.7% after 1.4%).

The drop in energy consumption is mainly explained by the decline in electricity and gas consumption, probably linked to the mild weather conditions in October, estimates INSEE. Consumption of manufactured goods experienced “a slight rebound” (0.4%, after -0.4% in September), and that of durable goods rebounded more clearly (0.5% after -0.4% in September).

Purchases of new cars are notably increasing. Spending on clothing and textiles increased by 0.5% in October. But purchases of shoes and leather are falling. Finally, purchases in the “other manufactured goods” category are almost stable (0.1% after -0.2%).