ORIGINAL FRENCH ARTICLE: Petit rebond de croissance et net repli de l’emploi
Translated Monday 2 September 2013, by
France came out of recession in the second quarter with a bigger jump in economic activity than expected, confirming the “encouraging signs of recovery” noted by the government. When you look more closely, the situation is not rosy, especially since unemployment continued to increase.
The national institute for statistics and economic studies (INSEE) announced on August 14, in an initial estimate, that gross domestic product (GDP) grew by 0.5% in the second quarter, compared to the first quarter. This rise follows two successive quarters of negative growth (down 0.2% in the last quarter of 2012 and in the first quarter of 2013), which technically plunged the country into recession.
At the same time, the INSEE announced a clear fall in salaried employment (a loss of 27,800 jobs) over the same period. The rise in unemployment affected all economic sectors and sharpened, following the loss of 8,300 jobs in the previous quarter. This continues to augur poorly for the reversal of the unemployment curve by the end of the year, which the executive branch is still promising.
“These figures confirm us in our strategy,” the prime minister, Jean-Marc Ayrault, nonetheless said cheerfully, echoing the minister of the economy, Pierre Moscovici, who sees “encouraging signs of recovery” in them.
Olivier Dartigolles, a spokesman for the French Communist Party, pointed out that “company expenditures for investment do not explain this jump in economic activity: those expenditures fell by 0.5% for the sixth consecutive quarter. Moreover, as a result of a lack of market demand and overly selective criteria for credit, the number of companies going bankrupt remains very high. Consumer expenditures boosted second quarter economic activity and, more particularly, household energy expenditures due to a harsh winter.”
The French institute on the economic situation (OFCE) has the same analysis. “Lasting economic recovery can only come if there is investment. Today, there isn’t any.”
Indeed, according to the INSEE, investment continued to fall, by 0.5% in the second quarter, following a 1% fall in the first quarter.