French unemployment falls for 6th month in row

28th October 2005, Comments 0 comments

PARIS, Oct 28 (AFP) - A drop in unemployment for the sixth month running in France is pleasing economists but has so far failed to convince householders of a brighter future.

PARIS, Oct 28 (AFP) - A drop in unemployment for the sixth month running in France is pleasing economists but has so far failed to convince householders of a brighter future.

"After six months of declining unemployment, it is becoming difficult to speak of an anomaly or chance," Xerfi analyst Nicolas Bouzou said on Friday.

Earlier, the French statistics institute INSEE had published figures showing a six-month drop in the unemployment rate from 10.2 percent to 9.8 percent.

For years, high unemployment has been a persistent problem in France resisting a range of measures and incentive schemes by successive governments.

The current centre-right government recently turned to relaxation of sacrosanct and tight job-protection laws to encourage employers to take on staff in the knowledge that they could now dismiss them easily.

The trend of unemployment is widely acknowledged to be a key issue in the run up to a presidential election in 2007.

Social Affairs Minister Jean-Louis Borloo said there were 22,000 fewer unemployed workers in September than the previous month in an interview with the newspaper Le Figaro.

"However, we must remain humble and continue the accompanying efforts for job seekers," he said.

However, analysts said that a small increase in economic growth in the second half of 2005 was a key factor in encouraging companies to begin hiring again.

But they also said that the recent measures to stimulate employment, including incentives for hiring workers, were also partly responsible for the improved unemployment rate.

French households, however, were not feeling more positive about future employment in October.

Household opinion of the evolution of unemployment "fell slightly in October", according to another report by INSEE published Friday.

Household confidence fell in October compared with September, the report said, adding that French households were "not more optimistic" about quality of life in France in the recent past or future.

The contradiction between an improved economic situation and negative household perception was not unusual, analysts said.

"It is simply linked to the fact that, unlike managing directors, households aren't in the front row of economic changes," Bouzou said.

Meanwhile, industrial production costs increased by 0.6 percent in September, following an increase of 0.3 percent in August, mainly linked to an increase in fuel prices. The annual increase was of 3.4 percent, according to a report by INSEE.

Analysts warned that high fuel prices could increase pressure on margins in the coming months.

Although cautious about the long-term impact of government measures to curb unemployment, many predicted it would continue to fall towards 9 percent over the next year.

Copyright AFP

Subject: French news

0 Comments To This Article