Insee's July household morale indicator reveals a further fall in confidence in the economic situation. They consider it more prudent to continue saving, which could weigh on the recovery.
A growing capacity to save
In July, Insee's household confidence indicator fell by 2 points on June, to 94, below its long-term average of 100. Insee's survey of 2,000 households questions the French on a number of topics:
- Past and future living standards
- Past and future financial situation
- Current and future savings capacity
- The opportunity to save
- The opportunity to make major purchases
- Price trends
- Unemployment
Insee's definition of French sentiment is therefore based on economic data. In July, the French confirmed their desire to continue saving, and their ability to do so. Indeed, the opportunity to save indicator rose for the third consecutive month, increasing by 9 points in July.
100 billion euros in savings by the end of the year
During the containment period, households saved 55 billion euros. While some of this saving was "forced", the trend continued despite the deconfinement: the total amount saved reached 75 billion euros on July 5.
According to analysts, a full catch-up of pre-confinement consumption levels by autumn looks increasingly unlikely, and the constrained savings of confinement are likely to turn into precautionary savings.
The government estimates that this savings could reach 100 billion euros by the end of the year, a sum likely to weigh on the economic recovery. Several measures have been taken to reassure households and encourage them not to save too much, such as the youth plan and long-term short-time working arrangements.
Nevertheless, for the third consecutive month, the proportion of French people who feel that their standard of living has improved over the past 12 months has again fallen sharply. While households' fears about unemployment have eased slightly, most remain cautious.