France's softening household consumption

The softening French May consumption stems from the non-energy component, which is estimated to have dropped by 0.5% mom. The upcoming summer sales, starting at the end of June, are likely to have fed through as consumers postpone their purchases.

Household consumption, boosted by a combination of lower oil prices and low inflation, was the main growth driver in Q1. Our view is that consumption is starting to ease, and will continue to ease over the coming months, on the back of increasing oil prices and recovering inflation.

The French National Statistical Institute (INSEE) to report that consumer spending on goods decreased by 0.4% mom in May (1.3% yoy). The carry-over for Q2 points to a contraction of 0.6% in household consumption, says Societe Generale.