French Wage Growth Softens

Wage growth in the French economy softened in the three months to June, as the eurozone’s second largest member state recorded another rise in private sector job creation.

Earnings growth rose by 0.4% in the second quarter, down from 0.6% at the start of the year. The first quarter wage climb was the best since 2014, NewsNow reported.

France has long suffered double-digit unemployment almost at a level three times that of rival Germany. But the country’s jobless rate is now at its lowest since the eurozone crisis at 9.6% as economic growth has picked up and business confidence has surged following the election of president Emmanuel Macron.

France’s stats office said 91,700 new private sector jobs were created in the quarter, up 0.5% compared to the previous three month period. Macron has made labor market reforms a priority for his new government. He is planning to revamp the country’s onerous labor code, making it cheaper for employers to hire people and freeing up wage bargaining.

Weakness in wage growth will weigh on French workers as the cost of living has risen this year. Inflation rose by an average of 0.7% in the second quarter, near double the pace of earnings growth.

A final inflation reading Friday morning confirmed prices rose 0.8% in July compared to the same month last year. The French economy expanded 0.5% in the second quarter–holding at the same pace for the last three quarters.