France’s Unemployment Rises to 7.9%: Full Employment in Jeopardy

France’s Unemployment Rate Rises to 7.9% — Full Employment Goal Slipping Away

France’s labour market is showing fresh signs of strain as unemployment continues to climb. According to the latest INSEE report, the national unemployment rate rose to 7.9% in the fourth quarter of 2025 — the highest level in over four years.

This marks a worrying step backward for the government’s “full employment by 2027” target, set at 5%, and signals mounting pressure on both policymakers and jobseekers.

A Return to 2021 Levels

INSEE’s data show that the number of jobseekers reached 2.5 million, an increase of 56,000 compared to the previous quarter. The jobless rate is now 0.6 points higher than a year ago, and analysts warn that this signals deeper structural issues rather than a temporary slowdown.

Economist Mathieu Plane from the OFCE described the situation as “a continuous but contained erosion” of the job market, with declines spreading across most industries.

Youth Unemployment: A Growing Crisis

Perhaps the most alarming figure concerns young people aged 15–24.
Youth unemployment surged 2.4 points in the final months of 2025, reaching 21.5% — its highest level in years.

Some of the key drivers include:

The end of apprenticeship contracts that don’t lead to permanent jobs.
Fewer entry-level opportunities as companies freeze hiring amid economic uncertainty.
A sharp 23.6% yearly rise in unemployed young people with no work activity, according to CGT data.

The youth job market has always been volatile, but the current figures point to long-term weaknesses in how France transitions students from training to employment.

Economic Stagnation and Job Destruction

Employment in the private sector fell by 0.2% over 2025, representing over 40,000 jobs lost. Construction and agriculture were hit hardest, though even traditional strong sectors like services showed weaker momentum.

The only area of growth came from non-market services — largely public sector and social care jobs — underlining an economy that’s struggling to generate sustainable private-sector employment.

What Lies Ahead for 2026?

Forecasts from INSEE and the Bank of France suggest only modest recovery in the year ahead.

INSEE expects unemployment to stabilise around 7.8% by the end of 2026.
OFCE predicts a slight rise, potentially edging up toward 8%, should economic growth remain sluggish.
Inflation moderating below 2.5% could offer some relief for household purchasing power, but business confidence remains fragile.

Macron’s Full-Employment Promise at Risk

When Emmanuel Macron set his ambitious target of “full employment by 2027”, the French job market was trending positively. Since then, a combination of slower growth, global headwinds, and domestic uncertainties has reversed much of that progress.

If current trends persist, the dream of full employment could remain just that — a dream.

Looking Forward

France’s challenge now lies not only in boosting growth but in creating quality, sustainable jobs — particularly for its youngest workers. Policymakers are expected to announce new labour and apprenticeship reforms in 2026, but whether they can reverse this trend remains uncertain.