The first fall in France's unemployment rate in four years was announced yesterday, bringing relief for prime minister Dominique de Villepin, who has made job creation the priority of his embattled new government.

But while Mr de Villepin and other cabinet ministers cautiously welcomed the fall in the unemployment rate from 10.2 to 10.1 per cent in June, it was dismissed as little more than a statistical blip by opposition politicians, trades unions and analysts.

The number of people looking for a job in France fell for the third consecutive month in June, dropping 28,000 to 2.75 million, according to figures from the public statistics office Insee.

An encouraging sign for the government was the even spread of the fall in unemployment among all age groups, including people aged under 25, who have been hardest hit by unemployment.

"Much remains to be done. We must go faster to relieve this worry, this anxiety," said Mr de Villepin.

"Of course, employment is the government's priority; we will continue every day to do more in this battle."

Since being appointed prime minister two months ago, after the crushing blow of the No vote in France's referendum on Europe's constitutional treaty, Mr de Villepin has vowed to restore public confidence within 100 days of taking office.

Yet it is too early for the measures he announced, such as making it easier for smaller companies to hire and fire staff, to have had any effect.

They will not be introduced until September.

Analysts said the drop in unemployment was mainly down to changes in rules on how job seekers are counted, as well as the social cohesion plan, launched at the start of the year to create jobs with local authorities and through apprenticeships. - (Financial Times service)