FR: ILO Unemployment Rate

Thu Dec 03 00:30:00 CST 2015

Consensus Actual Previous
Level 10.1% 10.2% 10.0%

According to the ILO data, the unemployment rate in mainland France rose 0.2 percentage points to a post-recession peak of 10.2 percent in the third quarter. Including overseas territories, the rate also climbed a couple of ticks to 10.6 percent from a slightly higher revised second quarter reading.

The increase in the metropolitan rate was the first in 2015 and came courtesy of a 75,000 jump in the number of people out of work, equalling the sharpest gain since the fourth quarter of 2012. Rises were reported in most sectors and, worryingly, particularly amongst 15-24 year olds where the rate was up a full percentage point at 24.6 percent.

The poor third quarter data reflect the sluggishness of the French economic recovery and threaten to undermine consumer confidence, already fragile in the wake of the Paris terrorist attacks. The October Eurostat report indicated no change in jobless versus its September reading but the likelihood of any major near-term reduction seems slim.

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.