France’s unemployment rate expected to fall to 7.6% in third quarter

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Insee forecasts a clear drop in the unemployment rate in the third quarter, to 7.6% of the French active population compared to 8% in the second quarter, linked to the strong rebound in employment, according to its latest economic report published on Wednesday.

"The strong rebound in employment in the middle of the year will result in a drop in unemployment from an average of 8% in the second quarter to 7.6%" in the third quarter, which is "almost one point less than two years earlier", said France’s National Institute of Statistics and Economic Studies (Insee).

The 7.6% rate is expected to be maintained in the fourth quarter, Insee predicts.

In its last economic note in July, the Institute anticipated a quasi-stability of the unemployment rate, at 8.2% at the end of 2021, after 8.1% at the beginning of the year.

Insee stresses that the "shock wave" linked to the Covid-19 health crisis has been "very cushioned in terms of labour market", with salaried employment having exceeded its pre-crisis level by the second quarter of 2021.

"The pace of job creation is expected to slow down a bit by the end of the year, but in total, around 500,000 net new salaried jobs will follow the 300,000 or so net job losses recorded in 2020," Insee points out in its economic note.

At the same time, economic activity "should globally return to its pre-crisis level by the end of the year - but without exceeding it, unlike employment," which maintains its growth forecast for 2021 unchanged at 6.25%.

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