French consumer spending falls unexpectedly

The consumer spending figure fell 0.2 percent month-on-month in May, INSEE data showed, well below a consensus forecast for a rise of 0.2 percent. Total consumption for June fell 1.6 percent compared with the same period a year earlier.

INSEE also revised downwards April's consumer spending figure to a rise of 0.5 percent month-on-month from a previous reading of 0.7 percent.

In separate data published on Tuesday, INSEE said the business morale indicator for June rose to 75 from a revised 73 in May, reflecting increasing confidence in the outlook for the French economy over the next 12 months.

A survey of purchasing managers also out on Tuesday showed that the downturn in French private sector activity eased for a fourth straight month in June, helped by much slower falls in the level of new orders.

A flash estimate of the Markit/CDAF composite purchasing managers' index (PMI) -- which combines data from firms in the services and manufacturing sectors -- rose to 47.7 in June compared with 46.6 the previous month.

The mixed data underlines the fragility of any nascent economic recovery, as rising unemployment looks set to drag on consumer spending in the months ahead.

The fall in consumption for May was led by a sharp drop in textile and leather sales, which fell 1.4 percent on the month and 4.8 percent compared to the same period last year.

Sales of household goods also fell 0.8 percent month-on-month, after rising 0.5 percent in May, INSEE said.