FRENCH unemployment hit a record 12.7 per cent in November, resuming its steady rise after a surprise drop in October, and economists said yesterday the peak was still some way off.
The number of unemployed rose by 20,700 last month, after a 12,000 decline in October, to reach 3,121,500 after adjusting for seasonal variations the Labour Ministry said.
This rise pushed the jobless rate based, on International Labour Organisation criteria, which exclude jobseekers who did any work at all in the month, up from 12.6 per cent of the workforce in October.
For the French government, languishing at record lows in opinion polls, the figures make its pledge to cut unemployment ever harder to fulfil as it tries to rein in spending to meet deficit criteria for joining the single European currency in 1999.
Economists said that although there were signs of recovery in the economy, which would eventually halt the lengthening of jobless queues, there was no quick solution.
The pressure on the social security deficit would continue.
"It's a bit disappointing as it reverses some of the surprise good news we had last time," Mr Philippe Brossard, head of research at ABN Amro in Paris, said.
"The economy is still moving up but it will be the end of spring before we see any impact on unemployment."
National statistics institute, INSEE, forecast earlier this month that unemployment would peak at 13 per cent, in the first half of next year before starting to decline gradually.
Mr David Brickman, European economist at Yamaichi International, was more pessimistic, saying: "The economy has got to grow at a much faster rate than at the moment to generate falling unemployment.
"Unemployment will probably peak around the third quarter next year but the risk is that it doesn't peak until much later.
"French labour laws are so rigid employers are not going to be encouraged to take on new labour.
Mr lain Lindsay, senior bond analyst at Credit Lyonnais, said the rise in the jobless total would make it all the harder to bring down the deficit in the social security system, which is financed mainly by payroll taxes.
France's social security system, fore cast to go into the red to the tune of 29.7 billion francs (£3.4 billion) in 1997 after an expected deficit of 51. 5 billion francs this year, is included in calculating the total public deficit for the Maastricht Treaty criteria.
The new jobless rise may also encourage further calls for lower interest rates in France to help revive the economy.
Former president, Mr Valery Giscard d'Estaing, has urged lower interest rates and a weaker franc to boost growth. Even some members of the Bank of France monetary policy council have said the state of the French economy called for lower rates.
Economists, however, said the French economy remained dependent on recovery abroad feeding through exports to the domestic economy as the worsening jobless situation would compound the uncertainty facing consumers.
