Companies registered 2.07 million new hires on contracts of longer than one month in the quarter, up 3.4 percent from the previous quarter and the highest level since figures were first collected in 2000, according to the ACOSS public social security fund.

Macron's first major reform, in September, was to loosen the labour code to give firms more leeway to set working conditions at the company rather than sector level.

In a sign that employers' confidence has risen since then, hiring was particularly strong for workers on permanent contracts. Employers have traditionally been reluctant to hire on such contracts over fears they would not be able to get rid of workers if business soured.

Hiring of workers on long-term contracts rose 6.4 percent in the fourth quarter with 48 percent of workers hired on such contracts. Hiring on fixed-term contracts rose only 0.8 percent, ACOSS, which handles employers' payroll contributions, said.

Meanwhile, France's jobless total dipped by 2,700 in December to the lowest level since September 2014, labour ministry data showed separately on Wednesday.

The French economy is on its strongest upswing since 2011, with business and consumer confidence at multi-year highs and so far the improvement has translated into a gradual decrease in the number of unemployed people since a peak in October 2015.

A purchasing managers monthly survey showed French business activity began 2018 more strongly than expected as a service sector pick-up offset marginally slower growth in manufacturing this month.

(Reporting by Leigh Thomas; Editing by Richard Lough and Richard Balmforth)

By Leigh Thomas