Consumption is not back in town. January still showed cautiousness, after a disappointing year-end. January private consumption of goods (+1.2% m/m) was still -0.4% below the October level and -1.8% below the November 2017 peak. Over the last quarter, the main weakness was in transport equipment (mainly cars), with a -3.1% decrease between October and January. Textile was also pressured since consumption showed no recovery (+0.2% during the last quarter) from a low starting point (-2.8% below November 2017). Overall, households are now a bit worried about food inflation which contributed 36% to the +1.3% y/y inflation in February). Obviously, food inflation has accelerated (+3% y/y in February), driven by higher producer prices (+6.1% y/y in January) and the impact of the new law on processed food prices (which rose by +0.4pp in February). Food consumption exhibited a new decrease in January (-0.9% m/m and -3.4% below the November 2017 peak). This data confirms that consumption growth should recover only gradually (+1% in 2019) despite good purchasing power growth (+1.9%).
