Pénicaud “guard ambition” of unemployment to 7% at the end of the quinquennium

Pénicaud "garde l'ambition" d'un chômage à 7% à la fin du quinquennat

The minister of Labour Muriel Pénicaud “keeps the ambition to provide” an unemployment rate of 7% at the end of the quinquennium, compared with 8.8% at the end of 2018, taking the view “that it is still under the foot” as evidenced in particular the persistence of recruitment difficulties of companies.

Commenting on Thursday the situation on the labour market in the 4th quarter of 2018, the minister has held “encouraging” that the unemployment rate has decreased by 0.3 point, to be passed under “the symbolic threshold of 9%, which is too long resigned”.

“It is not the full potential of employment”, insisted the minister, stressing in particular that one in two companies said they had recruitment difficulties according to the Insee.

While acknowledging “a macroeconomic risk, international” in 2019, Ms. Pénicaud wants to keep “the ambition of 7% because it is necessary to give an ambition strong to make structural reforms in the labour market”, insisting in particular on the reform of vocational training.

She further indicated that the government would soon double the number of people eligible for the scheme of “jobs francs”, which is currently open to 25% of the inhabitants of the districts of the policy of the city. If the results are “modest” with 4,300 contracts signed only since their launch on April 1, 2018, “this is the road on the qualitative level, because 87% of the contracts are signed by companies and 79% in IDUS”, she estimated.

In the fourth quarter, the decline in unemployment has been mainly driven by young people aged 15 to 24 years (down 1.7 point to 19.5%). Beyond the fact that the employment rate of the young reacts more strongly to the economy, the development of learning, with a record number of entries in 2018 (+7.7 per cent) may have contributed to this improvement.

The decline in unemployment is also the result of the lesser dynamism of the active population. In the fourth quarter, the activity rate remained stable to 72.3%.

According to the latest projection of Insee, the number of assets, which was increased from 152.000 people on average per year between 2005 and 2015, is only expected to increase only by an average of 62,000 people over the next decade.