Unemployment falls, business climate improves

29th July 2005, Comments 0 comments

PARIS, July 29 (AFP) - A sharp fall in unemployment in June, announced here Friday, and an improvement in business confidence point to a possible pickup in French economic momentum even though prospects are clouded by hesitant consumer sentiment.

PARIS, July 29 (AFP) - A sharp fall in unemployment in June, announced here Friday, and an improvement in business confidence point to a possible pickup in French economic momentum even though prospects are clouded by hesitant consumer sentiment.

Finance Minister Thierry Breton was quick to hail an announcement from the labour ministry that the number of jobless workers fell 1.4 percent in June to 2,448,900 while the unemployment rate dipped by 0.1 point to 10.1 percent of the work force.

The current French government, installed in June after voters rejected a draft European Union constitution, has taken aim at France's stubbornly high jobless rate, seen as the source of widespread public dissatisfaction with the leadership of President Jacques Chirac.

The administration has introduced measures designed to make it easier -- and less expensive -- to hire workers.

Breton on Friday described the June decline in joblessness as a step "in the right direction."

"We are up to the task and the road is long but believe me the government is truly mobilized."

The head of the opposition Socialist Party, Francois Hollande, dismissed the labour ministry report as a statistical fluke.

He said the figures reflected a move by the government to "systematically remove job seekers (from the unemployment rolls) and to increase alternative training and apprenticeships," adding that the fall in unemployment was "surely not the result" of government measures.

Maryse Dumas of the CGT trade union said that while the number of job seekers decreased by 35,200 in June an estimated 39,000 people were removed from the list of those looking for work.

"We are a long way from statistics proving that there has been an improvement in the job situation," she said.

Separately Friday the national statistics institute INSEE reported that the confidence of French families in their economic situation had held steady in July compared with June.

The agency earlier this week said confidence among French business leaders continued to recover in July but warned that the overall climate remained "gloomy."

Private analysts acknowledged the improvement in the French job market in July, with Nicolas Bouzou of the research group Xerfi predicting that the unemployment rate could decline to 9.3 percent next year.

"If the fall of the euro against the dollar picks up and if the price of a barrel of oil remains stable, the decline (in the rate) could be even more pronounced."

But analysts stressed that prospects for the French economy were uncertain in light of the sombre mood of French consumers.

"Household confidence is stuck at historically low levels," said Emmanuel Ferry of the Exane brokerage, who added that consumers have determined that now is not the time to spend money.

"The government re-shuffle and the naming of new prime minister have had no impact on household confidence, which is a historic first. It reflects the deep split between a political class incapable of reform and the public."

Copyright AFP

Subject: French news

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