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French jobless claims in June reach record high

Text by News Wires

Latest update : 2013-07-24

The number of jobless people in mainland France reached a new record in June, labour ministry data showed on Wednesday. The new figures come as another blow to President François Hollande's vow to bring down unemployment by the end of 2013.

More people were jobless in France in June than ever before, data showed on Wednesday in a fresh blow to President Francois Hollande’s pledge to reverse the rising unemployment trend by year-end.

The latest worsening of the job market, which came despite signs this month of a fragile recovery and the government’s insistence it will fulfill its year-end pledge, brought the jobless total to 3.279 million, a rise of 0.5 percent or 14,900 people from May.

Though young people are the hardest hit by the jobs crisis, with 555,800 registered out of work in June, that number was down 0.3 percent from May, the labour ministry data showed.

The jobs crisis has become one of the biggest headaches for the Socialist government, which says it is convinced the jobless rate will fall over at least two months before the end of the year despite fresh records being hit every month.

While unemployment is a lagging indicator, Wednesday’s data were still likely to dampen public spirits after Hollande and Finance Minister Pierre Moscovici have sought in recent days to drum up optimism over the economy, declaring the recession over.

France is one of a handful of rich-world economies with a double-digit unemployment rate, the others being fellow euro zone members Spain and Italy, along with South Africa.

Industry surveys have painted a less bleak picture for the months ahead, with data compiler Markit’s purchasing managers index showing earlier on Wednesday that France’s business slump moderated more than expected in July.

The manufacturing sector index rose to a 17-month high, which put it within a fraction of the threshold between contraction and expansion.

In separate data on Tuesday, the INSEE statistics agency said industry morale rose to its highest in over a year in July, though it is still some way from a long-term average of 100.

With industrial output also doing better than expected, INSEE and the Bank of France have both forecast that the economy grew by 0.2 percent in the second quarter, technically pulling out of a shallow recession but still basically flat.
Hollande called for an end to pessimism in a Bastille Day TV interview in mid-July, highlighting a rebound in consumer spending and the improved growth outlook.

Yet only two days earlier, Fitch stripped France of its last top-notch AAA credit rating, citing worries over its debt burden, high jobless rate and weak economic outlook.

France’s current account deficit widened in May, data showed earlier this month, and the government’s budget deficit balance widened in the first five months of the year. Meanwhile, consumer confidence hit a record low in June.

The labour 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.

(REUTERS)

Date created : 2013-07-24

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