FR: ILO Unemployment Rate

November 17, 2016 12:30 CST

Consensus Actual Previous
Level 10.0% 9.7% 9.6%

The ILO unemployment rate for mainland France rose by 0.1 percentage points to 9.7 percent in the quarter just ended. Including overseas territories, the rate also moved a tick higher to 10.0 percent.

Metropolitan joblessness was up 31,000 versus the second quarter at 2.805 million, largely reflecting a 1.2 percent increase in youth unemployment. At the same time, the employment rate dipped a tick to 64.6 percent with permanent jobs declining 0.3 percent.

The latest data just about leave intact a falling trend in unemployment but the quarterly rise highlights the risks to the jobs market of inadequate real GDP growth. Moreover, from already historically high levels, any further rises in joblessness could hit consumer confidence at the expense of household consumption and the economic recovery.

The unemployment rate measures the number of unemployed as a percentage of the labour force. It is based on the International Labour Organization (ILO) 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 report contains data on both total joblessness and just mainland unemployment; the latter is regarded as the more significant.

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.