French Payrolls Fall More Than Twice Initial Forecast

By Helene Fouquet and Gregory Viscusi

Sept. 11 (Bloomberg) -- France lost more than twice as many jobs as initially reported in the second quarter as economic growth contracted for the first time in more than five years.

Payrolls, excluding government employees, farm workers and the self-employed, fell for the first time in more than four years, declining by 28,800, or 0.2 percent, to 16.04 million from the first quarter, when they rose 0.4 percent, statistics office Insee said today in Paris. Insee on Aug. 14 released an initial estimate of 12,200 jobs lost in the quarter.

Europe's third-biggest economy is feeling the pinch from the global economic slowdown and contracted 0.3 percent in the second quarter. French Finance Minister Christine Lagarde said today on radio France Inter that economic growth will slow to ``around'' 1 percent this year. That's half the pace of a year ago, she said.

The European Commission yesterday predicted that the French economy will stagnate in the third quarter and expand 1 percent this year, the slowest pace in six years.

The economy also created fewer jobs than initially reported in the first quarter, Insee said. France added 47,800 jobs in the three months through March, an increase of 0.3 percent. That's less than the 57,400 jobs and 0.4 percent rise initially estimated on Aug. 14. The jobless rate stayed at the 25-year low of 7.6 percent in April-June period, Insee said.

Job Cuts

Credit Agricole SA, France's third-largest bank, will eliminate about 500 jobs at its Calyon corporate and investment banking unit to rein in costs, following three consecutive quarterly losses. Societe Generale, France's second-largest bank, said Aug. 26 it plans to hire 8 percent fewer employees than in 2007 in France.

European Aeronautic, Defence & Space Co. said it will shift work to non-European countries including Tunisia as it seeks 1 billion euros ($1.4 billion) in cost-savings. Automaker Renault outlined plans Sept.9 for the elimination of 4,000 jobs in France by April 2009.

Today's report also provides a first estimate for job creation in the not-for-profit field, which include positions subsidized by the government. The number of those posts climbed by 9,700, or 2.2 percent from a year ago, to 2.1 million.

Merging both categories, total private-sector employment, excluding the self-employed, fell 0.1 percent from the previous quarter to 18.14 million.

To contact the reporters on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net. Gregory Viscusi in Paris at gviscusi@bloomberg.net.