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French unemployment rises again
PARIS, France (Reuters) -- French unemployment rose to 9.2 percent in February as companies continued to lay off staff and cut costs in response to sluggish business and jitters about the spectre of a war that ultimately began in Iraq on March 20. The number of people officially registered as unemployed on the basis of International Labour Organisation measurements rose 0.8 percent versus January to 2,489,000, figures published by the French Labour Ministry on Friday showed. The headline unemployment rate in the euro currency zone's second biggest economy climbed up to 9.2 percent in February from 9.1 percent the previous month, matching forecasts from economists polled by Reuters in advance of Friday's report. The number of people reported as unemployed as a result of economic troubles and direct layoffs at firms rose 3.6 percent to 17,100, the ministry said. French cabinet spokesman Jean-Francois Cope said on LCI TV France was experiencing "difficult times'' and that the economic slowdown had hit more than 18 months earlier, reversing the situation on the jobs front. Economy shakyIn a separate report overnight, statistics office INSEE said the main immediate threat to growth was from weakening household consumption -- a risk that tends to rise along with unemployment. It said consumption would likely continue to grow, but slowly -- 0.5 percent in the first quarter and 0.3 percent in the second quarter, excluding energy -- as unemployment rose to 9.3 percent by mid-year. INSEE halved its previous forecast for economic growth in the second quarter to 0.3 percent, saying it expected a similar level for the first quarter and that the prediction for the second quarter was based on an assumption that the war in Iraq would be over by the end of April. Paris tourism has suffered in the opening months of the year as war looked increasingly inevitable, as has airline business. Air France said on Wednesday it was freezing all new hiring due to an airline industry downturn but that it would nonetheless honour a pledge to employ some of the 3,500 who lost their jobs when carrier Air Lib collapsed last month. Finance Minister Francis Mer said last week he believed that unemployment would creep higher in the coming months before a hoped-for economic recovery kicked in. Unemployment started to rise again in the last few months of the old Socialist-led government's rule as the global economic downturn that fanned out from the United States in 2000 started to hit increasingly hard in job terms in Europe. The number of people official registered as jobless in ILO terms stood at 2,409,000 in June, when the current government took power in elections from the left-wing administration that had ruled for five years. National data issued by statistics office INSEE on Thursday this week showed a further sharp fall in business morale during the month of March, echoing the message that emerged in reports from other European countries like Germany, Italy and Belgium. Also this week, INSEE reported a 0.5 percent dip in consumer spending for February, the most marked decrease seen since last November. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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