its WAY beyond that....
France's Jobless Rate Declines More Than Expected to 7-Year Low of 10.8%
By Francois de Beaupuy
European Economies: French Jobless Rate at 7-Year Low (Update1)
(Reorders paragraphs. Adds other reports at end of story.
Updates markets.)
Paris, Dec. 30 (Bloomberg) -- French unemployment fell in
November to its lowest level in seven years as companies,
confident about prospects for sales, stepped up hiring.
The jobless rate declined to 10.8 percent, the lowest since
November 1992, from 11 percent in October, the Labor Ministry
said. The jobless total fell by 50,000, after a 30,000 drop in
October. Much of the hiring in recent months has come in service
industries such as telecommunications and computers.
''We plan net hiring of about 800 next year,'' said
Christian Viguie, a spokesman at Unilog SA, a computer
consultancy employing about 4,400 people. ''Technological
progress is the driver of our growth.''
The report provides the latest evidence of accelerating
growth in France, Europe's second-largest economy. Soaring
business and consumer confidence may presage higher investment,
production and hiring in coming months, analysts said.
Bonds fell after the report, pushing the yield on the
French 10-year government bond up 5 basis points to 5.47
percent, on expectations the European Central Bank will raise
interest rates next year to restrain inflation. France's
benchmark CAC 40 stock index surged 1.2 percent to 5906.01, near
a record high.
Still High
Joblessness in Europe's second-largest economy has been
declining since peaking at a post-World War II high of 12.6
percent in June 1997. Government incentives, together with
faster-than-expected economic growth of about 2.8 percent this
year, have spurred job creation.
''The trend remains the same,'' said Philippe Gudin, an
economist at Goldman, Sachs & Co., who expects the unemployment
rate to fall to 9.5 percent by the end of next year.
The French government has tried to boost hiring by
introducing a jobs program for people under age 26, encouraging
early retirement and phasing in from next year a reduction in
the workweek to 35 hours from 39 hours.
The French unemployment rate is still the second-highest
after Italy in the Group of Seven most industrialized nations.
The rate is more than twice that of the U.S. and remains above
the euro-zone average, which fell to 9.9 percent in October,
also near a seven-year low. High labor costs and inflexible work
rules have often prompted French companies to boost production
by investing in computers and other equipment rather than
hiring.
Economy Accelerating
The French economy grew 1 percent in the third quarter, its
fastest pace since the fourth quarter of 1997, and added 97,800
private jobs, the most in 10 years, the government said earlier
this month.
Growth in the 11-nation euro zone, which includes France,
is forecast to reach 2.9 percent next year, the fastest in a
decade. Inflation, too, is picking up. Reports today from Italy,
Spain and the Netherlands showed rising producer prices.
Annual inflation in the region accelerated to 1.6 percent
in November, moving closer to the ECB's ceiling of 2 percent.
The bank raised its benchmark refinancing rate by half a
percentage point to 3 percent on Nov. 4.
French business confidence, which reached a five-year high
in December, points to further hiring by manufacturers and
service companies.
Eiffage SA, a construction and engineering company that
employs about 42,000 people, increased its staff by about 5
percent this year.
Job Creation
The French economy will create 215,000 jobs in the private
sector in the first half of next year, after adding 320,000 jobs
in 1999, the French statistics office Insee predicted earlier
this month.
Those numbers rise to 245,000 and 420,000, respectively,
when including hiring in the so-called non-competitive
industries, such as public administration. Most of the jobs
created in the public sector are state-sponsored jobs for
youths, Insee said.
Today's report showed that in the third quarter, 85,000 of
the 98,000 jobs created were in service industries.
Temporary hiring rose a monthly 2.7 percent in October, as
industrial output rose by 0.8 percent. Manufacturers account for
more than half of hiring on temporary contracts because
companies prefer to tailor their workforce to their production
needs.
Today's report showed the biggest decline in unemployment
was for those under 25. There was a 2.8 percent decline in the
number of unemployed women in that category and a 2.6 percent
drop for men.
Other reports in Europe today showed:
-- Swiss consumer prices rose 0.3 percent in December as
the cost of oil increased, pushing the annual rate to the
fastest pace in four years. Prices rose 1.7 percent from a year
earlier, the Federal Statistics Office said. (See NI SZECO).
-- French industrial-component prices rose 0.2 in November
from October, led by gains in the cost of chemicals, rubber and
plastic, Insee said. Prices climbed 1.1 percent in the last
three months and rose by 0.8 percent from a year earlier. See
(NI FPECO).
-- Prices charged by Spanish factories, farms and mines
rose 0.2 in November from October, the National Statistics
Institute said, and 3.1 percent from a year earlier -- the
biggest annual increase since January 1996. (See NI SPECO).
-- Prices charged by Italian manufacturers and mining
companies rose 0.5 percent in November, pushed up by
electricity, gas and water costs. Producer prices rose 2.2
percent from a year earlier, statistics institute Istat said.
(See NI ITECO).
-- Dutch producer prices rose 1.2 percent in November from
October and 6.1 percent from a year earlier, the government
said. (See NI NEECO).
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