Surprise fall in French jobless

Are French economic prospects getting brighter?

The number of people out of work in France slipped lower last month, taking economists by surprise.

This is definitely a statistical anomaly

Philippe Waechter, Banques Populaires Asset Management.

The jobless total fell by 6,000, or 0.2%, to 2,424,000 using International Labour Organisation (ILO) criteria.

The unemployment rate remained at 9% for the fourth month in a row, defying analysts' forecasts that it would rise to 9.1%.

Analysts are still expecting the number of jobless to rise, with the French economy forecast to grow by only 1% this year.

"This is definitely a statistical anomaly, a sort of white noise rather than a turnaround in the trend," said Philippe Waechter, chief economist at Banques Populaires Asset Management.

"The jobless rate is probably going to be a bit higher by the end of the year, but with these figures today, I am having trouble predicting at exactly what level."

Economy struggling

Last Friday, the latest GDP figures showed that the French economy grew by just 0.2% in the June to September period.

we do not expect the economic climate to improve in the next three to six months

Nicolas Claquin, CCF

Growth was held back by low investment levels by companies, even though consumer spending stayed strong.

The national statistics institute INSEE said earlier this month that investment was expected to fall by 7% this year.

However, on Thursday INSEE said business confidence had risen in November for the first time in four months.

Analysts said this rising confidence could be behind the fall in the jobless total.

"It could be because business leaders are adopting a wait-and-see attitude," said Nicolas Claquin, economist at CCF.

"However, we do not expect the economic climate to improve in the next three to six months and the jobless rate should then start to go up gradually."