- Unemployment fell a lot at the end of 2019, reaching 8.1%, according to INSEE. It returns to its 2008 level.
- This Thursday, the Minister of Labor, Muriel Pénicaud, reaffirmed that the target of 7% unemployment in 2022 was "achievable".
- However, economic institutes are less optimistic.
At the start of the five-year period, the objective seemed distant. But today, seeing unemployment fall to 7% by 2022 is becoming "frankly attainable", according to Muriel Pénicaud. The Minister of Labor did not hide her optimism on Thursday, when the latest figures from INSEE were published. According to the statistical institute, the unemployment rate of the working population fell by 0.4 points in the last quarter of 2019, to settle at 8.1% of the working population. A record since 2008.
Several elements encourage the government to be optimistic. First, the unemployment rate has been falling almost continuously since 2015. By extrapolating the trend, it would be possible to reach 7% by 2022. A target that is not "absurd", estimated Daniel Cohen on LCI this Thursday. The decline being on average "0.1 point per quarter, therefore 0.4 per year", "if it continues at this rate, we will be around 7 (or) 7.5%," said the director of economics department of the Ecole Normale Supérieure.
Another element that encourages confidence: last year, 260,000 jobs were created, according to INSEE, against 225,000 in 2018. In twenty-two departments, the unemployment rate is already equal to or less than 7%.
The most measured economic institutes
However, the economic institutes are more cautious than the minister. In its forecasts published last December, Unédic anticipates that 7.9% of the working population would still be looking for a job in 2022. The Banque de France, too, predicts that the rate would drop "below 8% end of 2022 ”. In its economic outlook published in October 2019, the French Observatory of Economic Conditions (OFCE) again anticipated a drop in unemployment to 8%. But earlier: by the end of 2021.
These institutes expect a weakening of the current dynamic. "The net creation of jobs should gradually decrease (...) to around 150,000 in 2020, before stabilizing around 80,000 per year in 2021 and 2022," forecasts the Banque de France in its projections published in December 2019.
Not enough growth
Job creation should be reduced, in particular because economic growth is not high enough. "With growth of 1.2% per year, the unemployment rate will continue to drop, which is most important. But probably not 0.4 points per year. Reaching 7% in 2022 is a very difficult challenge, ”judges Gilbert Cette, teacher-researcher at Aix-Marseille University.
In addition, the favorable effects on employment of certain tax measures favorable to businesses, such as the Tax Credit for Competitiveness and Employment (CICE) - implemented from 2013 to 2019, then transformed into a drop in long-term charges - start to run out of steam. "We will always have a positive effect related to economic policy (...), but the margins of companies will be a little lower, since we remove the effect of the tax credit," estimated AFP Philippe Waechter, chief economist at Ostrum Asset Management.
The slope is all the steeper as vagaries can upset government plans. “In the fourth quarter of 2019, we had a 0.1% drop in GDP, while INSEE forecast 0.3% growth. We must therefore remain very careful, ”continues Gilbert Cette. At the global level, several events worry economists: the continuous slowdown in Chinese growth, which could worsen with the coronavirus epidemic, or the Brexit that became official in late January. However, "a breach of trade agreements with the United Kingdom could cut France's GDP by 0.2 point by 2020", estimates, for example, the OFCE.
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