French jobless up again

PARIS, France -- France's jobless rate rose to 9.0 percent in June 2002 from a revised 8.9 percent the previous month.

The increase, announced by the Labour Ministry on Wednesday, was more than expected and is the 12th increase in 13 months in what is Europe's third largest economy.

The number of unemployed rose by 17,000, or 0.7 percent, to 2,409,000, according to data based on International Labour Organisation criteria.

The increase takes into account seasonal variations.

The figures were announced as the national statistics office INSEE reported that French industry expected demand to decline in the current quarter after growing at a slower pace in the second quarter.

The survey was carried out in July, following back-to-back elections which handed a second term to conservative President Jacques Chirac and installed a centre-right government in place of the previous Socialist-led coalition.

Many economists say the unemployment picture will likely get worse before it gets better.

"We expect the unemployment rate to rise to 9.3 percent in September or October because this is a lagging indicator, which will still be reflecting today's economic slowdown,'' Jan-Eric Fillieule, an economist at CCF bank, told Reuters.

"This rate should fall to nine percent in December thanks to expected improvements in the third quarter. Until this date growth will not be sufficient to create jobs.''

The jobless figures come on the heels of deteriorating business confidence news. Company executives in France believe growth -- especially in the manufacturing sector -- has sputtered and they hold out little hope that the economy will pick up any time soon, INSEE said on Tuesday.