French jobless claims rose in September by the highest margin since the depths of the financial crisis in early 2009, hitting a new record and dealing a blow to President Francois Hollande’s pledge to quickly reverse rising unemployment.
However, the Labour Ministry attributed the rise largely to the inclusion of some unemployed people omitted from the August figures due to a technical glitch.
Hollande has staked his economic credentials on securing a drop in unemployment by the end of the year. Most economists consider this unlikely, but the government is confident it can use state-subsidized jobs schemes to reverse the rising trend.
The number of people registered out of work in September rose by 60,000 to a new record of 3,295,700, representing a monthly increase of 1.9 per cent and an annual rise of 8.1 per cent, the ministry said.
The increase, the biggest since April, 2009, wiped out a 50,000 decrease seen in August, which had represented the first fall in jobless claims in more than two years and the biggest in over six years.
Noting that some 320,000 people had received state-subsidized jobs since the start of the year, the Labour Ministry said the Socialist government was more than ever determined to get unemployment falling by year-end and keep it on a downward trend.
But the government’s pledges are of little assurance to job-seekers such as Jean-Francois, who used to work in communications and has been out of work for a year.
“There’s nothing suggesting a recovery’s underway and it’s still very difficult to find a job,” he said outside a government employment agency in Paris.
Economists polled by Reuters expect the unemployment rate, which stands at 10.9 per cent, to start falling only in the second half of 2014 after peaking at 11.1 per cent.
“Companies are still overstaffed because they have seen their order books fall,” said economist Bruno Ducoudre at think-tank OFCE.
French business activity all but stagnated in October after growing for the first time in 19 months in September, a monthly survey showed on Thursday.
Although the economic outlook has gradually improved, layoffs continue unabated with companies ranging from book retailer FNAC to investment bank Natixis among the latest to announce job cuts.
Rising unemployment, anger over tax hikes and rows among ministers has driven Hollande’s popularity to record lows and is eroding his chances of getting a second five-year term in the next presidential election to be held in 2017.
Four-fifths of French voters do not believe that he can win the election, according to a poll published on Thursday, while some 76 per cent of those surveyed consider that Hollande is not someone who keeps his promises.