While it anticipated a 9.5% unemployment rate by the end of the year in September, the institute now expects it to rise a bit more (+0.2%) to reach 9.7%, according to an economic report published on Tuesday.
Despite the drop in employment, the unemployment rate had decreased in the first half of the year (to 7.1%) because during the lockdown a large number of unemployed individuals had halted their job searches, leading to a decline in the number of unemployed for the International Labour Office (ILO).
This effect will largely fade in the second half of the year with the unemployment rate expected to be 9% in the third quarter and then 9.7% by the end of 2020. This increase is the result of massive job cuts that occurred in the first half of the year (715,000 salaried jobs), which would rise slightly in the second half to reach 730,000 salaried jobs and 840,000 jobs in total.
Nearly a third of the job losses in the first half of the year were concentrated in sectors that were permanently affected (passenger transport, aerospace, accommodation and food services, cultural and sports activities), even though they only account for 13% of salaried employment.
Due to new restrictions imposed on certain sectors and the uncertainties regarding the evolution of the health situation, Insee confirms its forecast of a 9% recession for this year.
