Turnaround or setback? Unemployment rate up to 7,4%

According to figures published Wednesday by INSEE, the number of unemployed as defined by the International Labor Office (ILO) increased from 64.000 to 2,3 million people.

The previous quarter had already been marked by a slight increase (+0,1 point).

For 15-24 year olds, the increase in the third quarter is 0,7 points to 17,6%. It is 0,2 points for those aged 25-49 at 6,7% and stable for those aged 50 or over at 5,1%.

“We could expect such an increase given the slowdown in the global economy linked in particular to the tightening of central bank monetary policies – and geopolitical tensions,” immediately affirmed the Minister of Labor, Olivier Dussopt, in a message sent to the press.

He added that he remained "fully mobilized" in the face of this increase which he hoped would be "one-off", stressing that "if employment takes a break this quarter", recruitment tensions "remain high in the economy".

Yves Jauneau, head of the INSEE labor market synthesis and economic situation division, noted to AFP that this “slight” increase “follows several quarters of relative stability since 2022 and a longer decline, almost uninterrupted between 2015 and 2022.

“The unemployment rate has returned to its level of the second quarter of 2022, but it is still at a rather low level over the long term,” he added. It thus remains “significantly below” its peak in mid-2015 (-3,1 points), according to INSEE.

According to Mr. Jauneau, "we will have to wait a few quarters to see if this slight increase is confirmed, to see if it is the start of a trend."

"Wrong way"

For Mathieu Plane, of the French Observatory of Economic Conditions (OFCE), we are indeed "in a phase of the beginning of reversal of the unemployment curve in the wrong direction".

While employment had been "very very dynamic for almost three years", the OFCE forecasts a reduction in volumes in the coming quarters, accompanied by an increase in unemployment, notably against a backdrop of "sluggish" or "sluggish" growth. increase in production costs,” he recalled. The organization indicated in mid-October that it expected the unemployment rate to rise to 7,4% at the end of 2023 and 7,9% at the end of 2024.

The Banque de France also predicted in mid-September that the unemployment rate would gradually rise to 7,8% in 2025.

In its last economic report in mid-October, INSEE, for its part, had forecast a slight increase in the second half of the year to 7,3%, a level "very close" to that published on Wednesday, according to Mr. Jauneau.

The Minister of Labor continues to say he is convinced that full employment is achievable, i.e. an unemployment rate of around 5% in 2027.

It is counting in particular on the law "for full employment", adopted by Parliament on Tuesday which aims in particular at better coordination of actors in the public employment service, reorganized into a network around Pôle Emploi renamed "France Travail".

But Mathieu Plane emphasizes that if there is not "an explosion in the unemployment rate", he has "difficult to imagine that it is just a simple pause". In the eyes of the economist, this “makes the objective of reducing the unemployment rate to 5% by the end of the five-year term extremely difficult”. An objective made “all the more complicated” with the pension reform which “increases the number of active people on the labor market”.

Bruno the Mayor calls on the majority to “remain faithful” to Emmanuel Macron’s promise

The Minister of the Economy Bruno Le Maire on Wednesday called on the majority to "remain faithful" to Emmanuel Macron's promise to transform the social model and the economy to achieve full employment, believing that we are "at the crossroads paths".

The minister spoke on Europe1 and CNews after the publication of the unemployment rate figures for the third quarter.

Like the Minister of Labor Olivier Dussopt, Mr. Le Maire above all saw in this increase "a consequence of the slowdown of the economy in Europe, and of the world economy".

“We have done considerable work to reach 7%” (unemployment) and “if we want to keep the road map set by the President of the Republic and go from 7 to 5, we will not achieve this with a social model constant", estimated the minister.

He cited "at least three things to change", the ease of mobility of employees, thanks to "a very offensive housing policy", an acceleration of the training of seniors, also advocating a reflection "on compensation systems unemployment, to maintain a real difference between labor income and redistribution income.

“I just call on the majority to remain faithful to what the original promise of Emmanuel Macron and the President of the Republic is, to transform our social model, our economy to achieve full employment, to reindustrialize the country and so that everyone live well from his work,” said Mr. Le Maire.

According to him, "we are at a crossroads": "For the remaining four years, do we live on our achievements or do we restart the machine of structural reforms, of transformation of our social model, of the labor market, to aim for full employment, reindustrialization and the restoration of public accounts? I plead very strongly for the second path", concluded Mr. Le Maire.