French households are optimistic. INSEE the French statistical institute has just released its consumer confidence survey for August.
The synthetic index is 2% above its historical average. Last November, at the start of the Yellow Vests movement, the index was more than 8% below this average.
The change has been important. The real change is that now, households have a positive outlook on their immediate future. In November, they were very pessimistic on their purchasing power due to higher taxes on diesel. This is no longer the case. This extra tax has been withdrawn, the labor market is more supportive (150 000 new jobs have been created during the first half of 2019), and the economic policy has pushed up purchasing power.
The budget constraint is less tight than it was perceived and the labor market sends a positive signal. This change in perception can be seen on sub-index in the survey. The financial situation for the next 12 months which reflects the financial situation for an individual is above its historical average and the index for Standard of living (for all the French people) is also above this average. This can be completed by the perception that unemployment is no longer a important source of concern. French households’ perception on unemployment is also on the optimistic side.
In other words, the rapid reaction of the government has limited the impact and duration of the Yellow Vests crisis.