Paris, March 30 (BridgeNews) - France's unemployment rate hit its lowest level in more than a decade in February, falling to 8.8% of the workforce as new job offers multiplied, the government reported Friday. The number of people out of work fell by 40,000 to 2,315,000, while the number of registered job-seekers fell by 27,200 to 2,092,500.
Job offers rose by more than 6% from January, though compared with February the year before the pace was nearly six times slower.
Prime Minister Lionel Jospin's Socialist government seized the news as further proof that its employment policies, especially for French youth, are creating positive economic returns. "The recent favorable economic climate in France alone doesn't explain the historic sharp downward trend in joblessness," Labor Minister Elisabeth Guigou said.
But the apparent good news is shadowed by large layoff plans announced by a couple of French companies earlier in the week, and by the continued softness in the U.S. economy, which may bump French and euro-zone job creation, economists said.
They also noted that the sharp unemployment drop recorded at the start of this year may have been fueled by seasonal factors, suggesting that the recent progress might be slightly overestimated.
"We expect the fall in unemployment to lose some steam throughout this year," said Stephane Deo, economist at UBS Warburg, although the bank still sees the unemployment rate down to 8.2% at year-end.
Dominique Barbet, economist at BNP Paribas, added that slower U.S. growth heralds a weaker appetite for French goods--a phenomenon bound to impact an already weakened French industrial sector.
But the services sector, which makes up about 75% of the economy, would only be hit in isolated areas, suggesting the overall French labor market will see a more limited impact than Germany, which sends a higher proportion of manufactured goods across the Atlantic.
"We'll continue to see a dichotomy in the industry sector and the service sector," Barbet said. "Employment gains have been more important in France...(the labor picture) won't be as affected as other countries in Europe," he said.
"The bottom line is that the decline in unemployment will slow, but we will still continue on a downward trend."
The labor ministry said the decline in joblessness was widespread in February, though sharpest among young persons. Overall youth unemployment fell by 2.1%, and was down by 1.3% among workers between 25 and 49 years of age. It was down by nearly half that rate among workers 50 years and older.
Both males and females got off the dole at an equally rapid rate in February, while the number of long-term unemployed, those without a job for a year or more, fell by nearly 700,000. According to the labor ministry, this category has seen a 40% decline over the last three and a half years.
However, the figures showed that 336,000 persons registered at French jobless offices in February, an increase of 2.6% compared with January. The number of those made redundant for economic reasons rose 2.0%, while the number registering as unemployed due to the ending of a temporary job jumped 3.4% in February. End
By BridgeNews