French Companies Add Jobs at Fastest Pace in More Than a DecadeBy
Composite PMI rises to 57.5; economist estimate 57.0
French companies raised prices the most since March 2012
French companies added jobs at the fastest pace in more than decade at the start of the fourth quarter amid robust order growth.
A composite Purchasing Managers’ Index unexpectedly rose to 57.5 in October from 57.1 in September, IHS Markit said on Tuesday. That’s the highest reading in more than six years and above economists’ forecasts for a decline to 57.0.
The report comes after French President Emmanuel Macron started to make good on a campaign promise to loosen labor laws in the euro area’s second-largest economy. The upbeat reading may feed into expectations that the European Central Bank will decide on Thursday to gradually reduce stimulus next year.
The expansion in jobs was “buoyed by a combination of strong domestic and foreign demand and labor-law reforms,” said Alex Gill, an economist at London-based IHS Markit. “Further employment gains look likely as we move through the final quarter of the year.”
Output growth was broad-based. The services sector showed its best performance since March, and manufacturing expanded at its fastest pace in six and a half years.
Faced with continued growth in new orders, French companies lifted their selling prices for the second month in October. While the increase was the sharpest since March 2012, it still lagged the rise in input costs.
Manufacturing and services activity in Germany probably eased in October, with an index due for publication at 9:30 a.m. Frankfurt time forecast to drop to 57.5 from 57.7. Economists predict a similar gauge for the euro area will also decline slightly to 56.5 from 56.7. Those data are due at 10 a.m.