EMU: Unemployment Rate

January 9, 2017 04:00 CST

Consensus Actual Previous
Level 9.8% 9.8% 9.8%

The number of people out of work fell just 15,000 on the month to 15.989 million in November. This left the jobless rate unchanged and as expected at 9.8 percent, a decline of 0.7 percentage points from a year ago.

Amongst the larger Eurozone states, it was a mixed picture with a stable unemployment rate in both Germany (4.1 percent) and Spain (19.2 percent) contrasting with a 0.2 percentage point drop in France (9.5 percent) and a 0.1 percentage point rise in Italy (11.9 percent). Germany continued to post easily the lowest rate (Malta was next at 4.8 percent) while Greece (23.1 percent in September) remained firmly at the top ahead of Spain and Cyprus (11.2 percent).

Youth joblessness fared less well, rising a further 48,000 after a 7,000 increase in October to lift its rate fully 0.3 percentage points to 21.2 percent. This was only 0.6 percentage points below its mark in November 2015.

Overall the November unemployment data are somewhat disappointing but should not stop the fourth quarter from recording a sizeable decline that, in turn, should help to underpin consumer spending at the start of 2017.

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.