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French jobless total surges to new record

Paris - The number of people out of work in France surged in February by 31 500 to a new record, dealing a blow to President Francois Hollande's government during local elections.

Labour Ministry data showed on Wednesday that the number of people registered out of work reached 3 347 700 in mainland France, up 0.9% over one month and 4.7% over one year.

The increase was the biggest since a computer glitch caused a huge jump in September. Excluding that month, it was the worst deterioration in the job market since April 2013.

Hollande's poll ratings have dropped to record lows after he failed to fulfil a promise to get unemployment, which stands at 10.2%, on a downward trend by the end of last year.

The labour ministry put a brave face on the figures, saying they contrasted with other recent data like business sentiment surveys which have pointed to a tentative recovery in the eurozone's second-biggest economy.

"The February unemployment figures mean that one should remain cautious about the current very slow rate of recovery and its potential impact on the job market," said ING economist Julien Manceaux.

Local elections go to a second round of voting on Sunday. Hollande's Socialist Party was punished in the first round last Sunday in part over voter frustration with his lack of progress on taming unemployment.

"Unemployment will not decrease decisively before the third quarter, and as it increases again, voters are likely to confirm their defiance at Sunday's second round of local elections," Manceaux said.

French media is rife with speculation that Hollande will reshuffle his government and possibly eject Prime Minister Jean-Marc Ayrault.

Despite the election losses, Hollande's government has said it will stick with economic reforms and spending cuts, including a plan to phase out €30bn in payroll tax on companies in exchange for hiring more workers.

The tax break is aimed at easing the cost of employing workers so French firms can recover lost competitiveness on international markets.

The government has spent at least €2bn on subsidised jobs schemes, which it is counting on to get unemployment falling.

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