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French consumer confidence near 3-year high

Staff writer |
France's consumer confidence rose to a near three-year high in February, signaling that the economy is creeping to a strong recovery after undergoing a slowdown at the end of 2014.

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The consumer confidence index rose to 92 in February from 90 in January, survey data from statistical office Insee showed Wednesday. This was the highest level since May 2012, when it was also 92, and also exceeded the expected score of 91.

The index measuring households' opinion of their past financial situation and their future financial situation climbed by two points each to -27 and -15, respectively.

More households considered it was a suitable time to make major purchases. The corresponding index advanced to -15 from -18 in the previous month. It was the highest value since October 2007 and remained close to long-term average.

Households' opinion of the past standard of living improved 5 points to -62 after three months of stability. Their appreciation on the future standard of living improved for the fourth month in a row. The indicator came in at -37, the highest value since June 2012.

Meanwhile, households' opinion of their current and future savings remained stable at 14 and -5, respectively, in February.

Unemployment expectations decreased in February as the corresponding index fell to 61 from 63.

The share of households thinking that prices increased fell to its lowest level since the end of 1999. The score for consumer prices in the coming twelve months rose to -44 in February from -45 in January.

In January, French inflation turned negative for the first time since October 2009. Consumer prices fell 0.4 percent in January. A similar rate of decline was last seen in September 2009.

The Purchasing Managers' survey earlier showed that the private sector logged its first upturn since April last year. The composite output index rose to 52.2 in February, the highest in 42 months.

In the fourth quarter, economic growth slowed to 0.1 percent from 0.3 percent in the prior quarter. The European Commission forecast the French economy to expand 1 percent in 2015 and 1.8 percent next year.

The French government this month secured parliament approval for a range of economic reforms, especially targeting the labor market, in a bid to cushion growth and influence the European Commission to give the nation more time to meet its public finance target.