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French Inflation Slows In February

French consumer price inflation slowed in February reflecting the downturn in manufactured goods prices and the slowdown in services prices, the provisional estimate from the statistical office Insee showed on Friday.

In a separate communiqué, the statistical office said household spending decreased sharply in January due to a notable fall in the consumption of manufactured goods.

Consumer prices gained 0.4 percent year-on-year in February, slower than the 0.6 percent rise in January. In the same period last year, inflation was 1.4 percent. Economists had forecast an annual rate of 0.3 percent.

Food prices and services cost grew at slower rates of 0.8 percent and 0.7 percent, respectively. At the same time, manufactured product prices were down 0.5 percent.

Month-on-month, consumer prices dropped 0.1 percent after a 0.2 percent rise in January. The decrease in manufactured goods prices accentuated due to the two-week extension of the winter sales, Insee said.

Year-on-year, the harmonized index of consumer prices advanced 0.7 percent after a 0.8 percent rise in January. The index was forecast to rise 0.5 percent.

Month-on-month, the HICP remained stable after +0.3 percent gain in the previous month.

Another report from Insee showed that producer prices in domestic market advanced 0.4 percent on year in January, breaking the drops observed from February to December 2020. Prices had decreased 1 percent in December. Month-on-month, producer prices climbed 1.2 percent after a 1.1 percent rise a month ago.

Household spending was down 4.6 percent, in contrast to the 22.4 percent rebound in December. Spending was forecast to drop 3.5 percent.

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