Pressure mounts on French government over job losses

FRENCH unemployment hit a record high as 27,790 joined the dole queues in September, turning the screws even further on a government…

FRENCH unemployment hit a record high as 27,790 joined the dole queues in September, turning the screws even further on a government accused by trade unions of turning its back on jobs to prepare for European monetary union.

The jump announced by the labour ministry was almost double the amount forecast by economists and took the number of workers without jobs up to 3,112,800, pushing the jobless rate to a record 12.6 per cent, from a revised 12.5 per cent in August.

The gloomy news came just two weeks after a 24 hour strike and demonstrations by tens of thousands of civil servants and other public employees across France over jobs and wages.

Economists said the increase set the scene for further rises this year and as a result augured badly for the rise in consumer spending which Prime Minister Mr Alain Juppe is counting on to bolster economic growth in the fourth quarter.

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Expectations of a further cut in official interest rates by the Bank of France were reinforced by the news.

Mr Sean Shepley, an international economist at CS First Boston bank in London, said that jobs figures looked bad for spending in the last three months of the year despite signs of a pick up in orders in the manufacturing sector.

"It looks like we're heading for a pretty lousy fourth quarter," he said.

On the union side, Mr Marc Blondel, head of the Force Ouvriere trade union and a vociferous critic of Mr Juppe, sought to capitalise on the news with a call to arms in the private sector.

"These are" all objective reasons for the employees of the private sector to stand up and fight layoff programmes and numerous plans to shed staff in the last quarter of 1996," Mr Blondel said.