Is a public statement, even if it has been pronounced by the president, enough to convince us? And does it reflect the reality? The announcement of a slightly better than expected growth for the 1^st quarter, a significant reduction of unemployment, along with the signature of a major contract with Australia related to the sale of submarines, are definitely good news. Regarding to the job market, it is undisputable. Figures are volatile, from months to months and transfers between different categories of jobseekers can affect their interpretation but there is no doubt the vertiginous rise, recorded during the last four years, is now slowing and may be stopped. That’s all to the good. But is a substantial reversal on the way? Not yet. And only such a turnaround can restore confidence, unlock timid attitudes inside business and household regarding hiring people and increasing consumption. And without confidence, the return to a solid growth is impossible.

If we look more accurately at numbers, including those which have just been released, foreign trade, housing and consumption, we have to be skeptical. First remark, nobody seems to have noticed, in the numerous comments about each publication, that 2016 is a bissextile year. February had one more day that in 2015. The quarter had a 1.1% longer duration. Mechanically, that must impact production and the other economic indicators. We don’t pay a higher rent and wages are mostly monthly based but we used energy and we ate that day. Obviously, INSEE published its number after a correction for seasonal variations and working days. And we can be sure that the February 29^th has been taken in their calculus. Normally, its impact will be spread over the year, i.e. 0.25% for each quarter. But 0.25% is roughly equal to the difference between the published growth rate, which could be corrected when the detailed figures for the 1^st quarter will be released, and the previous quarter growth rate. To declare that the numbers are better that those which were expected is true, but to affirm that they show a rebound is, at least, excessive.

Indicators related to some activities are not more convincing. As far as housing is concerned, if we notice a rebound in real estate transactions and credit, it doesn’t mean that production has followed. Credits are mainly related to existing property acquisitions and sometimes also, due to the fall of interest rates, to renegotiations of former loans, which is good for household purchasing power. But they are not linked to new building activity. Housing starts, which had rebounded during 2015 1^st half, are now stagnant. Consumption numbers, on the rise since the beginning of the year, are not more reassuring. They first reflect both the bissextile effect and the abnormal weather conditions, which have not been completely taken into account by the usual seasonal corrections. Autumn was mild, winter started later and spring was delayed. Energy consumption was very low during 2015 last quarter and very high, for natural gas especially, in March. It is sure April numbers will also reflect this exceptional situation. This has had an impact on the economic trends. But to see there the signs of an amelioration of the economic situation have no real sense. To see the consequences of climate change is also hazardous. When were created the proverb “Christmas on the terrace, Easter by the fire”, and the “Iced Saints”?

Regarding  the rise of other consumption goods, as car registrations or house equipments, which is the sign of a real increase of purchasing power, due to a low inflation, sometimes deplored, are we sure that it had really profited to growth and employment? Unfortunately, no. It is the most worrying point and it should moderate the enthusiasm of those who believe that” it is going to be better”, because the rebound of consumption has mainly profited to imports. For six months, we have seen a brutal degradation of our foreign exchanges and the fall of fossil fuels prices will not be able any more to camouflage it. Manufactured goods deficit has dramatically increased since 2015 Summer: 6,2 then 8,9 billions euros during the 3^rd and the 4^th quarters of 2015 and 11,5 billions during the 1^st quarter of 2016, calculated after seasonal and working days adjustments on CAF/FOB numbers. There is definitely no reason to cheer and to boast about. Competitiveness increase of our companies was the first objective of the government economic policy and this one has not been short of giving all possible resources to reach it. It had granted massive tax cuts through the “CICE”. And if we quote official analysis, the substantial weakening of the euro should have slowed down imports from outside the eurozone and stimulated our exports. Nothing has happened and our exports have even receded during the 1^st quarter. Foreign trade contribution to growth has again been negative since the beginning of the year, for the 4^th consecutive quarter, despite fossil energy prices fall.

The government is not the only one to be responsible. French people, through their economic choices, show they have not yet understood they were the main responsible for this disequilibrium. Car registrations trend since the beginning of the year is alarming since the rebound profits less to French brands than to foreign ones. Car industry deficit is continuously increasing, from 2 billions during 2015 3^rd quarter to 2.5 billions during 2016 1st quarter. The consequence of that is a window dressing improvement of the job market. A part time job or an interim contract is better than no job at all. And March numbers show it. So, is France doing really better and is the move started at the beginning of the year is going to be confirmed?

Unfortunately, the answer to these two questions is no. Numbers reflect a unique calendar situation which will continue in May since two public holidays occur on a Sunday, which will mechanically increase the number of working days, and the climate shift which will provoke a transfer of energy production and consumption from one quarter to the following one. They are not negligible moves. When growth is very slow as today, a minor event can significantly affect it.  

These results illustrate the failure of a policy based on the restoration of company margins through fiscal gifts. It has provoked neither a significant investment rise nor innovation efforts or even less creation of stable jobs. Supply side policy, which is not more modern than demand support policy produces results only if two conditions are fulfilled: to be targeted on activities which are supposed to react to it and to be implemented when demand is there. So companies can react efficiently. But none of these conditions has been fulfilled during the last four years. This why, if France is doing “a little better”, it is by comparison with a past poorly enviable situation and there is a lot of efforts to accomplish if we want France “does really better”.