French households' confidence about the economy remained unchanged in March despite expectations that lingering economic crisis will push unemployment.
Thursday, the French statistical office INSEE said its consumer confidence indicator was stable at minus 43 in March. The expected level was minus 44.
In March, households were a little more pessimistic about their expected living standards. The relevant indicator slid to minus 61 from the previous month's minus 59. At the same time, the measure for households' opinion concerning past living standards was unchanged at minus 77.
The balance of opinion about past financial position improved and households' opinion about their future financial position remained stable. The balance on the timeliness of making major purchases slightly went up in March.
Further, households' opinion about future unemployment figures slightly improved, but households still anticipate an unemployment increase.
To cope with the deepening economic and financial crisis, French firms were cutting headcounts and production. A day earlier, French Labor Ministry reported that the number of unemployed people increased 79,900 to 2,384,800 in February. The French government forecasts that employers would eliminate around 300,000 jobs in 2009.
The widespread fear of losing job had its reflection on consumer spending, which declined more than expected in February.
The second-largest Eurozone economy is on the brink of a recession after contracting 1.2% in the final quarter of 2008. The statistical office predicts a contraction of 1.5% in GDP in the first quarter, while the Bank of France sees a 0.6% fall.
Earlier in the month, Finance Minister Christine Lagarde lowered government's GDP outlook for 2009. The government expects GDP to fall 1.5% in 2009, down from 0.2%-0.5% growth forecast previously.
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