French morale is rising according to INSEE, but what is this indicator worth?

Weeks of waiting for a government that is far from representing the majority of French people, the start of the school year, the end of the Olympic Games, and on top of that, the rain. In short, nothing is coming together at the end of September to make you smile. And yet, the morale of French households is getting better and better, according to INSEEThis month, its household confidence indicator stands at 95, while the average since 1987 is set at 100.

“It is an indicator on the perception of the financial situation” only, specifies Dorian Roucher, head of the economic situation department at INSEE. Each month, the statistics institute questions 2,000 households on their perception of their own financial situation, the standard of living in France and their fear of unemployment in particular. To consolidate the result, “households are questioned for three months, and the panel is renewed by a third each month.” So much for the little internal kitchen.

The “War in Ukraine” effect has been erased

The idea is therefore not to say that the French are starting to look to the future with confidence at the start of the school year. “Household morale had plummeted with the start of the war in Ukraine, high inflation and the loss of purchasing power. For several months, things have been picking up, the price at the pump has dropped, food prices are no longer increasing,” explains Dorian Roucher. These two essential elements of purchasing power dictate the curve of household confidence, the expert specifies, much more than the country’s economic direction. In other words, the perilous budgetary balance of the State is not taken into account.

The dissolution of the Assembly had not reached the rebound in confidence this summer. “There is often a bubble of optimism around an election,” notes Dorian Roucher, although it is “too early” to speak of a legislative effect in 2024. As for the hard blow of the start of the school year, the expert specifies that this well-known seasonal effect is “corrected” in the published data. Still, with this score of 95, the morale of French households had not been this high since February 2022, just before the start of the war in Ukraine.

The French, those big pessimists

But the French are “tendency more pessimistic over time”: since 2007, the confidence index has only exceeded 100 points for thirty months. Suffice to say that the average of the indicator is only held up thanks to the solid economic confidence of the 1990s, which has long since vanished. Last March, at the dawn of this renewed economic confidence, a Ipsos survey even indicated that the French were “less and less happy”.

At that time, only 71% said they were happy, 3 points less than in 2023 and 7 less than at the end of the first lockdown, the golden age of home well-being. And almost half (47%) are unhappy with their financial situation, which may explain the mixed confidence in the INSEE indicator. More inclined to sulk than to smile, the French are also “in a kind of wait-and-see attitude” despite their better purchasing power, preferring to save rather than consume. They also prefer to make up for the gap between their salary and the cost of living.

However, there is no point in overplaying the gloom card: we are not doing any worse than the others. The INSEE indicator is harmonized with other European indicators, which indicate that “confidence is rising” almost everywhere in Europe. “French households are average,” reassures Dorian Roucher, somewhere between the Spanish, who are more optimistic, and the Germans, where “industrialists are even more pessimistic.” Does that cheer you up?

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