France December final services PMI 49.5 vs 48.1 prelim

• Composite PMI 49.1 vs 48.0 prelim

That's a modest revision higher but it still points to a contraction in French services activity, with demand continuing to stay weak. Of note, higher interest rates and inflation are the two main sticking points that are weighing on overall conditions. S&P Global notes that:

"2022 ended with a second successive monthly decline in services activity across France. Overall, the latest survey data round off the worst quarterly performance in the sector since early-2021 and will fuel the calls of an impending recession in the euro area's second-largest economy.

"The biggest drag on the performance of the service sector in December was demand. Higher interest rates are slowing activity in sectors sensitive to changes in borrowing costs such as real estate, while persistent inflation continues to squeeze real incomes and is eroding purchasing power.

"Inflation in services is certainly staying a lot stickier than in manufacturing, with services input costs rising at a slightly quicker rate in December. That said, companies appear to be absorbing more of the burden than they have been recently as customers become resistant to price hikes. We subsequently saw the rate of output price inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term ease in December.

"Overall, the latest survey data highlight underlying fragility within the French economy. With interest rates set to rise further in the coming months, and inflation remaining stubbornly elevated for the time being, this fragility can be expected to continue."