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UPDATE 1-French jobless total gathers pace in September

Published 10/26/2009, 02:48 PM
Updated 10/26/2009, 02:51 PM
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PARIS, Oct 26 (Reuters) - France's headline unemployment gathered pace in September, according to official data released on Monday, with the government and economists expecting further increases.

The jobless total climbed 21,600 in September to 2,574,900, monthly data from the economy ministry showed. That was a 0.8 percent monthly increase and represented a 25.1 percent rise year-on-year.

Although the pickup beat some economists' forecasts, Economy Minister Christine Lagarde stressed in a statement that the pace had moderated markedly since the start of the year.

But the labour market situation in the euro zone's second-biggest economy remained difficult and the deterioration "should last several more quarters," she said.

Analysts have been predicting a sharp jump in the jobless rate but recent increases have been smaller than expected and in June the jobless total fell.

Still, the acceleration in September was nearly twice as quick as the pace expected by Guillaume Menuet, an economist with Bank of America Merrill Lynch in London.

Increasing numbers of people employed on short-term and temporary contracts helped to explain part of the pickup, he said.

The French economy grew a surprising 0.3 percent in the second quarter of the year, showing that France exited the recession that resulted from the global financial crisis.

A rise in unemployment would hurt consumer spending just as the economy is starting to recover.

Taking into account people working limited hours but looking for a position, the number of jobseekers rose by 44,900, or 1.2 percent month-on-month, the economy ministry data showed.

Unemployment among young people, the category that has been most hit in the last year, rose 0.1 percent from the previous month or 30.2 percent compared to a year earlier.

The data is not prepared according to the widely used International Labour Organisation standards and does not include an unemployment rate. However, it is politically significant as the mostly widely reported domestic jobs indicator. (Reporting by Tamora Vidaillet; Editing by James Dalgleish)

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