French Unemployment Drops, Signaling Strength in Economy

By William Horobin Features Dow Jones Newswires

The number of job seekers in France fell sharply in September from August after two months of increases, giving President Emmanuel Macron some breathing room in the midst of contentious overhauls of labor laws.

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The number of Category A job seekers -- people registered as fully unemployed -- fell 1.8% in September from August, the labor ministry said. After increases over the summer, September's decline brings the number to 3,475,600, just below the level in May, when Mr. Macron won the presidential election. It was the sharpest month-on-month drop in nearly 17 years.

The fall in the number of job seekers is the latest sign of the improving health of the French economy. An indicator of business confidence also published Tuesday showed optimism among France's manufacturers is at its highest level in almost a decade. And earlier this month, national statistics bureau Insee raised its economic growth forecast to 1.8% from 1.6% previously.

The strengthening economy gives Mr. Macron a boost as he faces criticism over his pro-business overhauls. Opposition parties dubbed him a "president of the rich" earlier this month when his government moved to cut spending and scrap a wealth tax in the 2018 budget. Mr. Macron has also faced street protests and strikes over decrees to loosen labor laws.

On Wednesday, the government will lay out how it will negotiate Mr. Macron's next overhaul with labor unions and businesses: changes to unemployment benefits, training schemes and apprenticeships. Mr. Macron must navigate between labor unions, which say they will oppose cuts to welfare, and businesses, who are against pouring more money into such programs.

Medef, the federation representing France's largest businesses, said the unemployment numbers should push the president to move faster with overhauls.

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"Let's be pragmatic in our fight against unemployment and make use of the wind of optimism and confidence that is blowing at the moment," Medef president Pierre Gattaz said.

The monthly unemployed number is closely watched in France. Mr. Macron's predecessor, François Hollande, set himself the objective of curbing its rise, encouraging the number to be used as measure of the success or failure of his policies. Mr. Macron's government has said it won't comment on the monthly figures.

Write to William Horobin at William.Horobin@wsj.com

(END) Dow Jones Newswires

October 24, 2017 13:51 ET (17:51 GMT)