EMU: Unemployment Rate

Thu Nov 03 05:00:00 CDT 2016

Consensus Actual Previous Revised
Level 10.0% 10.0% 10.1% 10.0%

The number of people out of work fell a sizeable 101,000 to 16,181 million in September following a revised 7,000 decline in August. The latest decrease left the jobless rate unchanged but only at the previous period's lower revised 10.0 percent mark. The outcome was in line with market expectations.

Nationally developments were mixed. Hence, the unemployment rate fell a surprisingly sharp 0.3 percentage points to 10.2 percent in France, although this still left it 0.2 percentage points above its recent low in June, and down 0.1 percentage points at 19.3 percent in Spain. Germany (4.1 percent) saw no change but remained at the bottom of the jobless ladder while Italy saw its rate climb a couple of ticks to an ominously high 11.7 percent.

There was welcome news on youth unemployment where a 51,000 drop saw the rate slide fully 0.3 percentage points to 20.3 percent, nearly 2 percentage points below its level a year ago.

The Eurozone jobless rate has been stuck at 10.0 percent for three months now. However, the trend is probably still down and business surveys have hinted at a renewed decline at the start of this quarter. This will be important if household spending is to pick up and provide the boost to the region's growth needed for there to be a self-sustaining economic recovery.

The unemployment rate measures the number of unemployed as a percentage of the labor force.

Unemployment data are closely monitored by the financial markets. These data give a comprehensive report on the state of the economy and its future direction. A rising unemployment rate can be a warning sign of hard times while a low rate can be a warning of inflation as wages are bid up to attract labor.

Unemployment data are expressed in both a numerical value and as a percentage of the labor force. Generally, the definition of those unemployed follows that of the International Labour Organisation (ILO). It states that an unemployed person is one between the ages of 15 to 74 years of age who was not employed during the reference week, had actively sought work during the past four weeks and was ready to begin working immediately or within two weeks. The unemployment rate is the percentage of unemployed persons over the total number of active persons in the labor market. Active persons are those who are either employed or unemployed.

Eurostat provides an unemployment rate for each EU country as well as for the EMU and EU as a whole. It should be noted that the unemployment rate for a country will frequently differ with that reported by the national statistics agency. That is because of the varying interpretations of the ILO definition by member states and Eurostat.