Blow for Hollande as French jobs deadline looms
After a one-month reprieve, data from the French Labor ministry released late on Thursday revealed that jobless claims are moving up again, casting doubt on the government's ability to curb unemployment.
For struggling president Francois Hollande, this data comes at a particularly bad time. For over a year now, Hollande has repeatedly pledged that the "unemployment curve" would be reversed by the end of 2013, a promise that appeared achievable after October's surprise decline in unemployment.
But according to the latest data, while the number of people working part-time has decreased, the number of people registered as out of work in mainland France in November grew by 0.5 percent on a monthly basis and 5.6 percent year-on-year.
The government remains upbeat, but it is looking lonely. The French statistical institute INSEE, the International Monetary Fund and the Organisation for Economic Co-operation and Development all predict that far from decreasing, unemployment in France will in fact increase in 2014. The OECD even expects it to increase through to 2015, when it will finally start showing signs of slowing down.
In a press conference following the publication of the figures, Michel Sapin, the French labor minister, argued that Hollande's promise had already been upheld.
"What is clear, is that throughout the year, we were able to stop the increase in unemployment […] and we have, in the fourth quarter of this year, reversed the unemployment curve."
He explained that during the first quarter of the year, the country had 30,000 more unemployed people each month, a figure that had dropped to 18,000 in the second quarter and to 5,500 in the third.
The minister now expects that in the fourth quarter, the country will see unemployment drop by 1,300 people each month.
But for Nicholas Spiro, managing director at Spiro Sovereign Strategy, France remains the "sick man of Europe" along with Italy. He explains that while the country's unemployment rate is stabilizing, it remains in double digits. The country "will be lucky to post any growth in the fourth quarter," he told CNBC.
That forecast has been echoed by many economists since November, when PMI (Purchasing Managers Index) data released by Markit indicated France could slip back into recession during the fourth quarter.
(Read more: Is France heading for a new recession?)
As no age group was spared from the rise in unemployment in November, Michel Sapin conceded that the government would have to be "particularly aggressive" to lower the over-50s unemployment total but argued youth employment had been reduced since May.
That view was countered by the French employers' body, MEDEF, who regularly calls on the government to cut labor costs. In a press release last week, it said the government was in the midst of making a "historical mistake".
By slashing state subsidies for apprenticeships in July of this year and increasing the budget for subsidized employment, the government had chosen the "short-term over the long-term", it argued.
"As every study shows, subsidized contracts can have a temporary effect on youth unemployment statistics", the press release said, adding that in over 50 percent of cases, when the contract has come to its end, young people once again find themselves on the dole.
According to Spiro, France struggles with a lack of job creation due to the weakness of domestic demand, the government's predilection towards tax-driven fiscal consolidation and the fact that it "has pussy-footed " around much-needed labor market reform. The country, he points out, is saddled with some of the highest labor costs among the OECD's 34 members.
France's persistently high unemployment and its inability to create enough jobs "is one of the most troubling issues plaguing the euro zone right now, Spiro argued.
(Read more:S&P cuts France's sovereign credit rating)
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