World Economy

France Private Sector Job Growth Fastest in Six Years

France Private Sector Job Growth Fastest in Six YearsFrance Private Sector Job Growth Fastest in Six Years

French private sector job growth grew at its fastest rate in least six years in the second quarter of the year, adding 91,700 jobs, data from the INSEE statistics agency showed on Friday.

The new jobs represented a 0.5% increase on the previous quarter, bringing the overall level to 19.21 million. The April-June period marked the 11th straight quarter of net new job creation in the private sector, Reuters reported.

The steady creation of new jobs is gradually helping heal France’s labor market, which saw huge job losses after the 2008 global financial crisis. They pick up has also been giving President Emmanuel Macron a tailwind as his government pushes through reforms to ease labor regulations.

But accelerating job creation has not yet been sufficient to bring unemployment substantially lower, partly because the number of people in the jobs market has also been rising.

Private sector job growth accelerated to 0.7% in the services sector, accounting for the large majority of new jobs, and by 0.4% in the construction industry, while remaining flat in the manufacturing sector.

Philippe Waechter, director of economic research at Natixis Asset Management, said that while the jobs figures marked another good set of data both for France and the broader eurozone, French labor reforms remained necessary. Waechter said such reforms were needed to ensure that employment growth could be maintained even if there was a downturn in the global economy.

“If the French economy could rapidly create jobs even when there is a downturn in the cycle, especially in sectors showing the strongest growth, then this would strengthen its ability to have some self-control over its own economic growth, which is what we are looking for,” he wrote in a note.

Bank of America Merrill Lynch economists added that data this week showing a dip in June industrial production in France—the eurozone’s second-biggest economy—showed the risks of the broader economic recovery petering out.

“This is another signal that the spring has been very strong, throughout the euroarea actually, but also that the carry-over for Q3 is weak,” they wrote in a note.

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