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French unemployment dips – along with confidence

The French government had just enough time to breathe a sigh of relief on Thursday, as official figures show unemployment pulled back in the last quarter of 2013, before a survey revealed the people's economic morale is plummeting.

For the first time in two years, French unemployment registered a quarterly dip in the fourth quarter of 2013, coming up at 10.2 percent. Furthermore, the country's national statistical agency, INSEE, also revised down the third quarter's reading to 10.3 percent from 10.9 percent previously.

Erlend Robaye - Erroba | Flickr | Getty Images

(Read more: Euro zone business activity strongest in 32 months)

France's Socialist government, under President Francois Hollande, has cause to celebrate the unemployment data. It had continuously promised throughout 2013 that they would "invert the trend" by stopping any increases in unemployment before year-end. A promise that seemed broken after two consecutive monthly rises in jobless numbers in November and December 2013, when it hit a record high of 11.1 percent.

But despite thawing unemployment, the jump in gross domestic product to 0.3 percent in the fourth quarter and the recent rise in business activity, confidence is just not filtering through to people.

France is the second largest economy in the 28-country European Union, after Germany, but its economy has been mired in low growth, worrying levels of public deficit and stubbornly high unemployment.

The latest "economic barometer" survey published by opinion poll company BVA on Thursday shows that for French people, the start of 2014 is not a good one.

It reveals that 72 percent of respondents say they are "rather less confident on the future", bringing the morale index, representing the subtraction between the people confident in the future and those who are not, to the "glacial level" of -46 in March writes Gael Sliman, director of BVA in the report.

This comes after the index fell by 9 basis points between January and March. For Sliman, this drop stems from the fact that people see the government's economic efforts as insufficient. Indeed, 71 percent of those surveyed assess Hollande's efforts as "not important enough."

(Read more: Hollande avoids personal life as he unveils reforms)

The survey results follows Hollande's unveiling of his government's flagship reform, the "Responsibility Pact" in January. Aimed at lowering labor costs, which remain some of the highest within the OECD rich-country club, the pact was initially well received by businesses and the public.

But momentum has slowed, as unions and government haggle over the fine print which states that the reduced labor costs would have to be matched with compensations or further efforts from businesses, such as improving working conditions and helping boost youth employment.

Marc Sailly, president at the management consulting firm Axys Consultant, is quoted in the survey saying that the results show that "all the benefits" from the announcement of the Responsibility Pact have disappeared.

"The government was unable to maintain the momentum with quick and concrete measures", explains Marc Sailly, and it also cannot "give sufficient visibility to its strategy on exiting the crisis."

Finally, the survey shows that 71 percent of French people judge the government has given the task of reducing the public deficit high enough importance. And they are not the only one.

The European Commission, the European Union's executive arm, has cast doubt on France's ability to reach its targets. It now expects the French public deficit to be at 4.2 percent in 2013 and at 4.0 percent in 2014, therefore missing its respective targets of 4.1 and 3.8 percent.

(Read more: A lot on Hollande's plate as he dines with Obama)

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