“French unemployment climbed to a 13- year high in the fourth quarter as companies eliminated tens of thousands of jobs to cope with a stalled economy.
The jobless rate based on International Labor Organization standards rose to 10.6 percent from a revised 10.2 percent in the previous three months, national statistics office Insee in Paris said today. Excluding France’s overseas territories, the rate was 10.2 percent, compared with a median forecast of 10.1 percent in a Bloomberg News survey.
Faced with an economy that fell back into recession early last year and risks doing so again, companies such as PSA Peugeot Citroen (UG), Renault SA and Alcatel-Lucent are slashing payrolls. That’s adding pressure on President Francois Hollande who is trying to retain support of unions while attempting to revamp Europe’s second-largest economy in the wake of the region’s sovereign debt crisis.
“Unemployment will likely rise further in coming months, with the peak only coming at the end of the year or early next year,” said Joost Beaumont, an economist at ABN Amro in Amsterdam. “The economy may gain some traction in the second half but it’s unlikely to be enough to induce companies to start hiring in a serious way.”
Hollande, elected last May, has said he aims to revive growth and reduce joblessness by the end of his five year mandate by improving French competitiveness.
His Socialist government yesterday endorsed a plan to overhaul French labor law to add flexibility in legislation that lawmakers will vote on later this month.
