In second-quarter 2024, the French economy showed tepid growth, with GDP increasing by 0.97 percent year-over-year and 0.2 percent month-over-month. On a quarterly basis, household disposable income's purchasing power grew at a slower rate of 0.2 percent compared to its 0.4 percent growth in the first quarter. However, consumption remained stable while the savings rate rose to 17.9 percent. This cautious spending behaviour suggests households are prioritizing savings amidst economic uncertainty.

Non-financial companies faced shrinking profit margins, with their margin rate dropping significantly to 30.8 percent, down from 31.7 percent in the previous quarter. This decline hints at cost pressures or weaker pricing power in the corporate sector. Government spending growth also slowed, while investment in fixed assets continued to contract, particularly in construction and capital goods, signalling weak business confidence and a sluggish investment climate.

On the trade front, exports grew modestly by 0.4 percent, bolstered by strong transport equipment sales, while imports recovered slightly by 0.1 percent, driven by demand for energy and food products. Consequently, foreign trade made a modest positive contribution to GDP growth.

In essence, the second quarter GDP numbers reflect an economy navigating through mixed signals: modest growth, cautious consumer behaviour, and weakening corporate margins, balanced by slight gains in trade. The flat domestic demand and inventories underscore the fragile state of the recovery, with growth largely supported by external trade.

No revisions are expected leaving quarterly growth of 0.3 percent and the annual rate at 1.1 percent.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Following the release of the flash estimate about four weeks earlier, the second report incorporates additional data to provide a more accurate reading. This is also revised in the final report, published in the third month after the reference quarter.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.