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Enron Mail |
The fall in French job creation stabilises Non farm payrolls (Q3) Actual: +0.3%qoq,+2.4%yoy UBS Warburg: Flat qoq,+2.1%yoy Consensus: +0.1%qoq,+2.2%yoy Previous: +0.3%qoq,+3.1%yoy Non farm payrolls are clearly a good surprise as we expected the growth rate to continue to plummet. However, the fall in labour productivity and the results from surveys lead us to believe that employment growth will continue to slow. This underpins our pessimistic scenario for Franc in the coming months. * Non farm payrolls are better than expected. But, after a 1.0% qoq growth recorded in Q4 last year, 0.8% in Q1 and 0.3% in Q2 and Q3 job creation is much less dynamic. * The number also show that the sharp increase in unemployment was partly due to an unusually high dynamism of the labour force on the wake of the suppression of the military service. * During the first two quarters of the year, job creation was faster than GDP resulting in a fall in labour productivity. With growth expected at 0.3% in Q3, non farm payrolls suggest that France could register a third (marginal) fall in labour productivity. This calls for a correction. Job creation growth could fall quicker in the coming quarters. * Job growth was essentially driven by the service sector. Since 1995, more than 95% of the new jobs were created in that sector. The deceleration also comes from this sector. After a growth pick at 1.2%qoq in 00Q4, growth was only 0.5 % in Q3 this year. This is hardly a surprise given, for instance, the sharp decline in temp agency work. St?phane D?o Economic Research UBS Warburg Tel : +33 1 48 88 30 36 Fax : +33 1 47 63 48 08 Mob : +33 6 76 85 33 18 Stephane.deo@ubsw.com
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