In full movement of "yellow vests", the morale of the French in free fall

A heavy fall and many questions: in full movement of "yellow vests", the morale of the French reached in November its lowest level for almost four years. According to'
Insee, "household confidence" stood at 92 points, three points lower than in October. This is "its lowest level since February 2015," said the public body in a statement. With this decline, which occurs in the midst of conflict
"Yellow vests", the mood of households – calculated on the basis of balances of opinion – is now "significantly below its long-term average", which is 100 points, said INSEE.

In November 2018, household confidence fell sharply: http://t.co/KASc3pUKAJ

– Insee (@InseeFr) November 27, 2018

"Such a fall is worrying"

The sign that the French have morale in the socks? "We could expect a decline, given the current socio-economic climate. But such a fall is worrying, "says Hélène Baudchon, an economist at BNP Paribas. "We are not at the trough of 2013-2014 wave, but we are still very low, especially if we compare the current figure to that reached after the election of Emmanuel Macron", namely 108 points , abounds Mathieu Plane, researcher at the OFCE.

"Paradoxical situation"

According to INSEE, the decline in November is mainly due to a renewed pessimism about the national economic context – the opinion of households on their personal situation having for its part only slightly deteriorated. The proportion of households estimating that the standard of living will improve in France over the next twelve months has thus fallen by 11 points compared to October. Unemployment fears climbed 21 points to their highest level since November 2016.

The number of French people who consider it appropriate in this context to make major purchases has fallen sharply. According to INSEE, the corresponding balance loses eight points and is below its long-term average, for the first time since December 2015. "It's surprising, because it comes at a time when purchasing power is supposed to increase, because of the tax cuts decided by the government, "says Hélène Baudchon, which evokes a" paradoxical situation "and" difficult to explain. "

The month of October was indeed marked by the second tranche of lower employee contributions for employees, but also by a 30% reduction in the housing tax for 80% of French, whose cost is estimated at three Billions of Euro's. "These are tax cuts of a magnitude almost never seen, but seem to remain invisible to many French. There is a gap between the accounting reality and the feeling, "badyzes Mathieu Plane.

"Not auspicious"

Will this wave of pessimism affect fourth quarter activity? This is likely, especially as the blockages of "yellow vests" have weighed on the activity of recent weeks, especially in the retail. "In supermarkets, the loss of turnover was 35% Saturday, November 17 and 18% Saturday, November 24," said Monday the Minister of Economy Bruno Le Maire, referring to "a severe impact For the activity.

For Mathieu Plane, the main danger comes from consumption, the main driver of the French growth, and which may not be as strong as expected at the end of the year, given the pessimism manifested by the sling of "yellow vests" . "Household morale is the feeling, it is not a very solid indicator. But the risk is that there is a precautionary savings that is formed, which would indeed penalize growth, "says the economist.

A disaster-like scenario for the government, which is counting on a solid last quarter, with a 0.5% increase in gross domestic product (GDP), to reach its growth target for 2018, set at 1.7%. "A good figure is still possible, especially since the price of oil fell sharply in November, which should stimulate consumption at the end of the year. But the decline in household morale is still very pronounced, which is not auspicious, "concedes Hélène Baudchon.