Unemployment rate dips

29th June 2007, Comments 0 comments

PARIS, June 29, 2007 (AFP) - France feasted Friday on good economic news as its jobless rate slipped below two million for the first time in 25 years and consumer spending helped the economy grow by 0.5 percent in the first quarter.

PARIS, June 29, 2007 (AFP) - France feasted Friday on good economic news as its jobless rate slipped below two million for the first time in 25 years and consumer spending helped the economy grow by 0.5 percent in the first quarter.

The employment ministry said late Thursday the French unemployment rate fell by 0.1 percentage points in May to 8.1 percent of the active population.

The ministry said the number of people out of work had dropped by 1.2 percent or 24,100 people to 1.987 million, according to France's own measurement of unemployment.

President Nicolas Sarkozy, whose campaign pledge was to put France "back to work" told a group of workers on a visit to central France he planned to cut the unemployment rate even further.

"For the first time, we are at less than two million, but it is still too high. We will get there, there is no reason why other countries succeed and we don't".

Other good news came from the national statistics office INSEE which said the French economy had expanded by 0.5 percent in the first quarter of 2007 and household confidence improved further in June to an indexed minus 12, its best level since 2002.

With economic growth set to continue throughout 2007, the government's full-year target of 2.25-2.5 percent appeared to be well within range.

On Thursday, Economy Minister Christine Lagarde told RTL radio: "It is indispensable that through competition and flexibility and within a framework of reinforced (economic) security, we can increase the rhythm of French growth.

"We want to get an additional (percentage) point of growth," she said, noting that "today we are about a point below most equivalent European countries."

Consumer spending contributed 0.3 points to the total growth figure, INSEE said.

Meanwhile, household confidence improved in June as the French deemed that their standard of living had increased in recent months and that their personal financial situation had also improved.

But many did not feel that would continue to be the case in the coming months, and a sub-index on the short-term trend that had risen sharply in May fell back in June.

The French were also less optimistic about the near-term perspectives for their personal finances.

An increasing number nonetheless felt the time was right to make important purchases, which augured well for consumption figures to come.

Also on the downside, French public debt rose to around 65.0 percent of gross domestic product at the end of the first quarter, from 63.7 percent  at the end of 2006, complicating the task of Sarkozy, who has also pledged to the EU to tackle France's public deficit and debt.

The debt rose to 1.176 billion euros from 1.142 billion. The public debt represents the total of past annual public deficits.

France's debt ratio has risen in recent years in breach of eurozone rules that debt must be no greater than 60.0 percent of output or be falling consistently and structurally towards this ceiling.

Copyright AFP

Subject: French news

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