March 23, 2023

The morale of the French remains at half mast, still weighed down by inflation

Posted Jan 27, 2023, 10:07 AMUpdated on Jan 27, 2023 at 10:25 a.m.

No improvement in sight in the morale of French households at the start of the year. After a year 2022 weighed down by a sudden darkening of the economic situation, against a backdrop of war in Ukraine and inflation, the INSEE indicator which summarizes the opinion of households as to their financial situation, the opportunity to saving, the standard of living in France or the fear of unemployment, fell by one point over one month in January 2023.

The household morale indicator thus stands at 80, a level around which it has been oscillating since the spring of 2022. It has lost 3 points over three months, and remains very far from the long-term average (1987-2002), which is of 100. Twice last year (in July then in September), the indicator fell to 79 points, a level not reached since June 2013.

The stigma of inflation

In January, the opinion of French households on their future financial situation fell by two points and the number of those who believe that it is appropriate to make major purchases lost one point. The deterioration is also visible in the opinion of households regarding the recent change in their standard of living, with a level that is approaching the historic low reached last July. The prospects for their future standard of living only lose one point.

The share of households who believe that prices will accelerate over the year is also falling, even if fears about inflation remain above average. “Almost all households believe that prices have increased over the past twelve months,” recalls INSEE.

Household confidence in their ability to save, both current and future, is also decreasing since these two indicators each lose two points, specifies INSEE, adding that they nevertheless remain above their long-term average. Lastly, household fears regarding the trend in unemployment remain virtually stable (+1 point) and the indicator well below its average.

With AFP

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