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Economy in Brief

France: The Riots Come Just When Unemployment Was Starting To Ease
by Carol Stone November 9, 2005

The riots in France are widely believed to be linked to unemployment conditions, particularly among young people from North African immigrant families. As we discussed here September 30, national unemployment stands at just under 10%, and the rate for workers under 25 is more than twice this, at about 23%. This morning, the French Government statistical agency INSEE reported regional unemployment rates, which we carry in the FRANCE database. These cover the total labor force and are not broken down by age-group. These, along with September's monthly national data reported ten days ago, indicate that rates have been decreasing, now since June.

In the accompanying charts and table, we highlight "departments" that the New York Times reports today contain cities on a list authorized by the central police to impose a curfew, that is, where the violence is deemed to be greatest. These include Paris, Nice, Marseille, Dijon, Toulouse, Strasbourg, Nancy, Rouen, Avignon. Ironically, as seen in the exhibits, unemployment rates in the relevant departments had started to ease in Q3. The national rate fell from 10.1% to 9.8%, and every department we show here was down by at least 0.1% on the quarter. Still, these decreases are a very recent development, with the longer runs of these series still generally headed upward. Only in Provence, in the South, is unemployment even steady with its level three years ago. Another fact of irony is the situation in Alsace, with one of the lowest unemployment levels in the country; it is also the locale with the largest increase, from just 6.6% on average in 2002 to 8.7% in Q3 2005. So conditions of relative prosperity there eroded markedly, at least through the middle of this year.

It's clearly too soon to see the effect of the disturbances on any other French economic data, but a final irony of course is that the situation is likely to be dampening activity, just when the worst of the unemployment conditions might have been starting to stabilize on their own.

France & Selected Departments: SA, % Q3 2005 Q2 2005 Q3 2004 2004 2003 2002
France: Total 9.8 10.1 10.0 10.0 9.8 9.1
Ile-de-France (Paris) 13.3 13.4 13.2 13.1 12.7 12.3
Bourgogne (Dijon) 8.5 8.8 8.7 8.7 8.6 7.9
Haut-Normandie (Rouen) 10.8 11.0 11.0 10.9 10.6 10.1
Alsace (Strasbourg) 8.7 8.9 8.6 8.5 7.8 6.6
Pyrenees (Toulouse) 9.8 9.9 9.9 9.9 9.9 9.5
Provence (Avignon, Nice, Marseilles) 11.7 11.9 11.9 11.9 12.1 11.7
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