PARIS, Jan 30 - France's unemployment rate rose to 9.7 percent in December as 11,000 more people joined the jobless queue, according to a Friday report which made ugly news for the economy and a government facing regional elections in March.
In a monthly report published on Friday, the Labour Ministry said the number of unemployed hit 2,635,000 in December, up from 2,624,000 in November, a monthly rise of 0.4 percent. It nudged the jobless rate up to 9.7 percent, a near 3-1/2 year high. Economists had been expecting the jobless rate calculated on the basis of International Labour Organisation methods to remain stable at 9.6 percent, a level registered in November following a small dip that month in the number of people out of work. On the eve of the latest report, the government said things were starting to look better for the euro zone's second biggest economy, where recovery in growth depends at least in part on consumer spending, itself affected by household fears over jobs. "All kinds of indicators right now point to growth reaching a rate of 1.5 to 2.0 percent. There will be a significant drop in unemployment due to rising growth in 2004," Labour Minister Francois Fillon told the Senate. The number of unemployed is roughly 200,000 higher than when the conservative government took power in a June 2002 election, ending five years of left-wing rule when there were large-scale job creation programmes and a stint of brisk economic growth. The December level of unemployment was 4.9 percent higher than a year earlier, according to the ministry report. With some 85 percent of people unhappy over the government record on jobs, according to a recent opinion poll, President Jacques Chirac has declared employment a top priority for 2004, wary of March elections that could produce a vote of sanction. His government also needs to nurture what is widely regarded as a fragile economic recovery from near recession, and fears of losing jobs is one of the main brakes on household spending, and economic growth in turn.
This month alone, France Telecom said it would cut its staff by 14,500 this year through early retirement and reassignments, and pharmaceuticals group Aventis said 12,000 jobs were at risk if a hostile takeover bid by rival Sanofi-Synthelabo succeeded.//