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French unemployment rises
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October 31, 2001: 7:21 a.m. ET
Rising rate sparks fears the country is heading for a severe slowdown
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LONDON (CNN) - The French unemployment rate has risen for the fourth consecutive month as firms continue to axe jobs, sparking fears that the euro zone's second largest economy is heading for a severe slowdown.
Labour Ministry figures on Wednesday showed France's headline jobless rate rose to 9.1 percent from 9.0 percent in August and the number of unemployed rose by a higher-than-expected 31,000, raising the number of unemployed to 2.43 million.
The news came shortly after French company Alcatel, Europe's fourth-largest telephone equipment maker, announced it would cut 10,000 jobs in Europe, as it posted a third-quarter loss.
"It is clear we are no longer in the same situation as at the beginning of the year. We are suffering the impact of the worldwide economic slowdown," Labour Minister Elisabeth Guigou told France Inter radio.
Although a spate of factory closures and lay-offs has sparked concerns that a U.S.-led global economic slowdown, compounded by the September 11 attacks, could trigger a recession, Guigou is hopeful about the future.
"This bad phase should, according to our forecasts, last only a few months," she said.
But economist Marie-Pierre Ripert, at investment bank CDC in Paris, disagrees telling Reuters: "We see a continued deterioration in coming months with a jobless rate which could hit 9.7 percent by mid-2002."
The rising jobless figures have the power to erode the economic achievements gained by the government of Prime Minister Lionel Jospin over the last four years, just six months before a general election is scheduled.
Jospin, who introduced the 35-hour working week last year, is expected to run for president against incumbent Jacques Chirac, although neither has declared his candidacy.
The French figures chimed with news from neighbouring Germany, Europe's biggest economy, where the number of unemployed rose by 20,000 in September from August, pushing the headline rate to 9.4 percent.
Although it is performing better overall than its larger neighbour, earlier this month France became the first major European country to announce a government stimulus plan to counter the impact of the attacks on the U.S. 
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