French Jobless Claims Rise to 12-Year High as Recession Looms

French jobless claims soared to the highest in 12 years as companies such as Peugeot Citroen SA (UG) trim payrolls to cope with a slowdown that some forecasts say will turn into a recession.

The number of people actively looking for work at the end of December rose by 29,700, or 1.0 percent, to 2,874,500, the Labor Ministry said today in an e-mailed statement. That’s the highest total since September 1999. In all of last year, the number of jobless climbed 5.6 percent from a year earlier.

The French economy is probably already in recession, with output shrinking in the last quarter and the current one, state statistical institute Insee said last month. Business (INSESYNT) confidence dropped to the lowest in almost two years this month as President Nicolas Sarkozy looks for ways to cut labor costs and reduce France’s budget deficit.

“The confidence shock and the banking crisis have had clear consequences for the job market,” said Pierre-Olivier Beffy, chief economist at Exane BNP Paribas in Paris.

To contact the reporter on this story: Mark Deen in Paris at markdeen@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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