French consumer spending (FRSNMANM) slid in November as surging joblessness and concern about the European debt crisis prompted households to cut back.
Spending fell 0.1 percent from October, when it rose a revised 0.1 percent, national statistics office Insee said today in an e-mailed statement. Spending fell 2.1 percent from the year-earlier period.
Stagnant household demand reflects concern about earning prospects amid rising joblessness and mounting concern that the euro area is entering a recession. President Nicolas Sarkozy’s renewed effort to trim the budget deficit at a time when Europe’s debt crisis is hurting confidence may restrain spending growth in the months ahead, economists have said.
“The French economy is likely to have stalled in the last quarter of 2011 given the sharp deterioration in confidence across the board,” according to the Organization for Economic Cooperation and Development.
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Euro-Area Manufacturing, Services Contract Less Than Initially Estimated
Euro-area services and manufacturing output contracted less than initially estimated in December, led by Germany, the region’s largest economy, where output reached a four-month high.
A euro-area composite index (ECPMICOU) based on a survey of purchasing managers in both industries rose to 48.3 from 47 in November, London-based Markit Economics said in an e-mailed report today. That’s above an initial estimate of 47.9 on Dec. 15. A reading below 50 indicates contraction. The German composite output gauge rose to 51.3 from 49.4.
Europe’s economy is edging toward a recession as governments toughen budget cuts to contain the region’s debt crisis just as global demand for exports falters. The International Monetary Fund may cut its 2012 global growth forecast this month after lowering it to 4 percent in September, when it predicted “severe” repercussions if Europe fails to contain its crisis.
“The uplift in the euro-zone PMI in December does little to dispel fears of the region sliding back into recession,” Chris Williamson, chief economist at Markit, said in today’s report.
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China Home Prices Slide Amid Speculation
China’s home prices fell for a fourth month in December after the government reiterated plans to maintain property curbs, according to SouFun Holdings Ltd. (SFUN)
Residential prices dropped 0.25 percent last month from November, said SouFun, the nation’s biggest real estate website owner. Prices slid in 60 out of 100 cities tracked by the company, including all of the country’s 10 biggest cities such as Shanghai and Beijing, it said in an e-mailed statement today.
The government said last month at an annual economic planning meeting that it won’t back away from real-estate industry curbs this year that are damping home sales and pulling down prices. The nation’s financial center of Shanghai and some other Chinese cities have also said they will continue to impose the home purchase restrictions this year.
“Home prices extended the downward falling tendency, but didn’t fall aggressively, because many developers have already achieved sales targets,” said Peter Bai Hongwei, a Beijing- based property analyst at China International Capital Corp., the country’s biggest investment bank. “Property is likely to be the last sector that the government will relax policies this year.”
Average home values nationwide climbed 2.9 percent in December from the same month in 2010 to 8,809 yuan a square meter (10.76 square feet), the slowest year-on-year growth since August, SouFun said.
