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By Tamora Vidaillet
PARIS, Aug 26 (Reuters) - France's headline unemployment rose by a relatively mild 10,700 in July after falling for the first time in a year the previous month as the intensity of job cuts appeared to slow compared with earlier in the year.
Monthly data issued by the Economy Ministry showed the headline jobless total in the euro zone's second-largest economy rising to 2,535,200, up 0.4 percent from June and 25.6 percent higher on the year.
A decline in the number of job seekers under the age of 25 offered encouragement but the government and economists warned of more jobs pain to come.
"Despite the slowdown in job losses for several months, the trend of a deteriorating jobs market has not ended," Economy Minister Christine Lagarde said in a statement.
"It should continue for a few quarters because even a gradual pickup in activity would not translate into an immediate easing in unemployment," she said.
Further restructuring by companies bruised by the economic crisis was bound to weigh on the jobs market even if the peak of the unemployment total had already been hit, according to Natacha Valla, an economist with Goldman Sachs in Paris.
"In terms of flows, I don't think we will go back to the worst months that we saw at the beginning of this year, when really a lot of jobs were being destroyed," she said.
The jobless total leapt by a record 90,200 in January before easing progressively in the following months.
It rose by 36,400 in May after jumping 58,500 in April and 63,400 in March.
The data is not prepared according to the widely used International Labour Organisation standards and does not include an unemployment rate but is politically significant as the most widely reported domestic jobs indicator.
According to the most recent figures from European statistics office Eurostat, the European Union statistics agency, France's unemployment rate stood at 9.4 percent in June, above the EU-wide rate of 8.9 percent.
Surveys show that unemployment is one of the leading concerns in the country and the liquidation by a French court on Wednesday of two textile firms in eastern France, endangering 175 jobs, was the latest in a string of bad news.
The French economy grew by 0.3 percent in the second quarter despite economists' expectations of a 0.3 percent contraction.
The government is still forecasting that the economy will shrink by between 2.5 and 3.0 percent this year. (Reporting by Tamora Vidaillet; Editing by Andy Bruce)