Source: Bloomberg – French Joblessness Climbs to Record
French jobless claims rose to the highest ever, increasing pressure on President Francois Hollande to revive an economy that has been stalled for two years.
The number of people actively looking for work increased by 36,900, or 1.2 percent, to 3.225 million, the labor ministry said today in an e-mailed statement. Economists expected an increase of 25,000, according to the median of three forecasts gathered by Bloomberg News.
The 23rd monthly increase takes the total number of jobseekers past the previous record of 3.195 million, which was set in January 1997 when Jacques Chirac had been president for less than two years. For Hollande, who won office last year on a campaign against austerity, the loss of tens of thousands of jobs at companies such as PSA Peugeot Citroen SA (UG) is contributing to a slump in the polls.
“Unemployment has been rising for five years and since my election it hasn’t stopped,” Hollande said today in Beijing. “The only way to change direction by year-end is to fully use all the tools we’ve put in place.”
Hollande has created a payroll tax-credit to aid companies and has cajoled unions and business groups to agree to ease labor laws to make it simpler to trim wages in a downturn. He has repeatedly pledged to reduce government spending and plans to overhaul the pension and unemployment benefit systems in coming months.
The unemployment rate stands at 10.6 percent, compared to the 11.3 percent reached in 1997.
“In one year in office, we’ve begun a lot of reforms,” Hollande, who came to power May 15, said today. “The whole action of the government is to fight for employment. I want all French people to unite behind this as a national cause.”
The problem for Hollande is that the French economy is failing to grow in the wake of Europe’s four-year-old sovereign debt crisis. Gross domestic product shrank in the first quarter and probably shrank again in the second, according to the median of economist 14 estimates gathered by Bloomberg News.
With tax increases intended to stem the budget deficit weighing both on investment and consumer demand, business confidence is declining. Sentiment among manufacturers dropped to 88 this month from 91 in March, according to an index published by national statistics office Insee earlier this week.
“Weakness is seen across the board,” Barclays Plc economist Fabrice Montagne said this week after the confidence report. The index is now low enough to “send a recessionary signal.”