Euro Zone Crisis

French jobless total stable in May at record high

French unemployment hit 14-year high of 10.8 per cent in March quarter

PUBLISHED : Thursday, 27 June, 2013, 12:34pm
UPDATED : Thursday, 27 June, 2013, 12:34pm

The number of unemployed people in mainland France was stable in May with a negligible rise of 100 people, just nudging the total to a new all-time high of 3,264,500, labour ministry data showed.

The figures, coming after two years of uninterrupted monthly rises, leave the number of jobseekers at the worst level since records began in 1996 and will add to doubts over President Francois Hollande’s pledge to reverse the trend by year-end.

“This stabilisation in May comes within a trend which remains a rising one and will remain so for the months to come,” the ministry said in a statement.

Europe’s No. 2 economy, which slipped into a shallow recession in the first quarter as output shrank 0.2 per cent, has been hit by a steady stream of industrial lay-offs in recent months as domestic demand and export markets flag.

The jobs crisis has become Hollande’s biggest headache a year into his term, turning opinion against him, particularly among low-income households, and putting a strain on state finances just as he is battling to cut back the deficit.

Over two years of uninterrupted rises, unemployment has risen by more than half a million in the country of 66 million.

The May data marked a slight respite after several months of strong rises since jobless claims soared past the psychological 3 million mark last August then hit an alltime high in March and another in April.

The unemployment rate, which is published quarterly and based on International Labour Organisation (ILO) standards, hit a 14-year high of 10.8 per cent in the first quarter of this year, its highest level since early 1999. The INSEE national statistics agency sees it hitting 11.1 per cent before the year ends.

Hollande said last week he still believed he could meet a goal to have unemployment show a clear drop by the end of this year, noting that meant a drop lasting more than a couple of months.

In a sign of his determination, having already missed growth and deficit goals, he has authorised raising the labour ministry’s next year budget by 1 billion euros, despite the quest to slash overall spending, so that more funds can be injected into a state-assisted youth jobs scheme.

He has also promised to improve jobseeker training and mobility.

The labour ministry said that some 33,000 young people have been hired in the last few months on the state-aided jobs. It said other indicators suggested hiring had recovered to some degree in May after sliding in March and April, and it noted a rise in temporary employment.

The ministry data is the most frequently reported jobs indicator in France, though it is not prepared according to ILO standards nor expressed as a percentage of job seekers.

INSEE forecast last week that the economy will contract by 0.1 per cent this year as subdued consumer demand weighs.

It said growth would be too weak for the economy to start creating new jobs, and forecast 114,000 posts being lost over the course of the year, sending the unemployment rate up to 11.1 per cent by year-end, just shy of a 1997 record of 11.2 per cent.