PARIS (MNI) – French unemployment rose in August for the 16th
consecutive month, pushing the jobless total above the psychological
threshold of 3 million, the Labor Ministry said Wednesday.
The number of registered jobless seeking full-time employment rose
by 23,900, or 0.8% on the month, boosting the total in this category to
3.011 million, up 253,900 from a year ago and the highest level in 13
years.
The ministry’s broader measure of jobseekers, including those now
in part-time jobs, rose by 40,800 or 0.9% to 4.495 million. Fewer
temporary employees were laid off than in August but fewer jobseekers
landed work or training positions.
Most age categories posted large increases in August, led by those
over 50 (+14,000 or 1.5%). Among people under 25, unemployment rose by
5,900, or 0.9%. In August, the number of jobseekers over 50 amounted to
946,300, while jobseekers under 25 totaled 677,100. Over the year, the
surge in senior jobseekers has been the most dramatic (+15.5%).
The number of people out of work for more than a year, accounting
for over 38% of the total, increased by 18,600 or 1.1% in August, to
1.73 million. The total is 9.4% higher on the year. Nearly half of this
group – 854,200 – have not worked for at least two years.
Since the financial crisis exploded, the headline number of
jobseekers has continued to climb. The increase in the jobless number
was 123,000 over the course of 2011, and the fact that it is now nearly
254,000 higher than it was in August of last year shows how it has
accelerated.
Mounting unemployment has contributed to an erosion in the
confidence of consumers and their willingness to spend and invest. Insee
reported earlier Wednesday that French consumer morale deteriorated
again in September, dragged down by a growing fear of unemployment and
an overall sense that the country’s standard of living will decline in
the months ahead.
Consumers said it was a worse time for them to spend on big ticket
items now than it had been over the past summer. The dampening effect of
high unemployment on wage gains for those who are still working only
reinforces the expectation of anemic consumption ahead.
Employment proved fairly resilient during the financial crisis and
surprisingly dynamic in 2010. But as economic activity has not yet
returned to pre-crisis levels and productivity is no longer recovering
significantly, firms have had to rationalize to protect severely
squeezed margins. Private sector payrolls began declining a year ago,
for a net loss of more than 60,000 jobs through June.
Leading labor market indicators are hardly promising. The
preliminary September PMI survey paints a particularly grim picture,
showing that French private sector firms slashed jobs at the sharpest
rate in 34 months, according to Markit, which produces the surveys. Both
manufacturers and service companies recorded steep drops in payroll
numbers, Markit noted.
With economic activity stagnating, the rise in unemployment is
likely to remain brisk as more and more firms downsize staff or go
under. This is the overriding social and economic challenge facing the
new government. To stem the mounting jobless tide, it has already
boosted the number of subsidized jobs by 80,000 and intends to add a net
20,000 next year with the creation of 100,000 new positions reserved for
low-skilled youth.
Even with GDP growth of 0.6% this year, employment would contract
by 0.1%, according to projections by the OECD. Current growth prospects
point to a steeper fall and little recovery next year. The national
statistics institute Insee expects private payrolls to decline by 0.2%
or 37,000 in the second half of this year.
The national unemployment insurance agency Unedic foresees a 10%
rise in unemployment through 2013, with increases in the headline number
of jobseekers of nearly 180,000 this year and close to 130,000 next
year, assuming GDP growth of 0.3% and 1.0%. Even the French government
is now conceding that a growth assumption of 1% for next year is too
optimistic.
The government’s 2013 budget, due out on Friday, is expected to
revise the growth forecast for next year down to 0.8% – and many
analysts don’t believe even that number is achievable, especially with
the spending cuts and tax increases that will be contained in the new
budget.
–Paris newsroom +331 4271 5540; e-mail: ssandelius@mni-news.com
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