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ORIGINAL FRENCH ARTICLE: L’OFCE prévoit une hausse du chômage en France en 2015

by Fabrice Savel with Reuters

OFCE Forecasting Rise in Joblessness in France in 2015

Translated Wednesday 5 November 2014, by Gene Zbikowski

The unemployment rate will near 10% of the active population in France in 2015, according to the OFCE’s latest forecast.

The unemployment rate will hit 9.9% of the active population in mainland France in late 2015, after reaching 9.8% in late 2014 and 9.7% in late 2013, according to the French Economic Observatory (OFCE) forecast published on Oct. 29.

“Today, overstaffing has reached 230,000 workers in the companies,” economist Eric Heyer said while presenting the OFCE forecast on Oct. 29, because companies have not adjusted their staffing levels as their activity has dropped in the course of the past few years. “This isn’t good news, this means that tomorrow, if there’s a little economic growth, it will serve to mop up this overstaffing,” Eric Heyer continued. “Growth will be much less rich in job creation.” This situation does not concern all sectors, notably the service sector where there has been downsizing, but it clearly exists in the building trades and in industry.

According to the research institute linked to Sciences-Po in Paris, government policies like the competitiveness-jobs tax credit (CICE), the fall in company social security contributions under the responsibility pact, and to a lesser extent the generation job contracts will permit the creation of 76,000 private-sector jobs next year. The OFCE forecasts the net creation of 39,000 private-sector jobs in 2015, following the creation of 11,000 this year and the shedding of 60,000 in 2013.

The public sector should see the net creation of 35,000 jobs next year (40,000 government-subsidized jobs and the loss of 5,000 non-subsidized jobs. “This rise will make it possible to absorb some of the people entering the job market, thus slowing the rise in unemployment, but they will not prevent a rise in unemployment,” the OFCE believes. Unemployment as defined by the International Labor Office will thus grow by 37,000 people next year, following an increase by 55,000 people this year.

The OFCE forecasts that economic growth in France will reach 0.3% in the fourth quarter of 2014, 0.3% in the first quarter of 2015 and then 0.4% in each succeeding quarter in 2015, raising the annual growth rate to 1.1% in 2015, after 0.4% growth this year.

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