On the ILO measure, the number of people out of work in mainland France fell 1,000 to 2.852 million in the quarter just ended. The minimal decline followed a 45,000 drop in the previous period and left the unemployment rate unchanged at 10.0%. Including overseas territories the rate was 10.3 percent, also matching its first quarter reading.
For metropolitan France the stable jobless rate masked a 0.6 percentage point decline to 23.4 percent in the youth rate and an equivalent offsetting increase to 7.0 percent in the rate for those above 49 years of age.
Having risen by more than 100,000 over the second half of 2014, the decline in unemployment so far this year is all the more welcome. Even so, the lack of any real progress last quarter is a worry. Indeed, according to the latest monthly data from Eurostat, the jobless rate moved up again in July. Consumer confidence had been climbing quite steadily since late last year but has struggled in recent months. A stagnating labour market will not offer any help here and does not bode well for a much needed acceleration in French economic growth.
The unemployment rate measures the number of unemployed as a percentage of the labor force. It is based on the International Labor Organization definition of unemployment, which excludes jobseekers that did any work during the month and covers those people who are looking for work and are available for work.
The data report the number of unemployed persons (quarterly average) for metropolitan France and for metropolitan France plus overseas departments. The metropolitan measure is regarded as the more useful guide.
The data provide a comprehensive report on how many people are looking for jobs and the unemployment rate. These numbers are the best way to gauge the current state as well as the future direction of the economy. Analysts in France and Europe tend to focus on the number of French out of work rather than the unemployment rate as we do in the U.S.
Despite the delay in publication of these data, investors can sense the degree of tightness in the job market. If labor markets are tight, investors will be alert to possible inflationary pressures that could exist. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall.
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