FR: ILO Unemployment Rate

May 18, 2017 12:30 CDT

Consensus Actual Previous
Level 9.5% 9.3% 9.7%

Joblessness in metropolitan France fell by 1115,000 or 0.4 percent on the quarter to 2.674 million in the January-March period. As a consequence, the unemployment rate dropped 0.4 percentage points to 9.3 percent, its sharpest decline since it began the current downtrend at the end of 2015 and equalling its lowest mark since the first quarter of 2012. Including overseas territories, the rate was 9.6 percent, down from 10.0 percent at the end of 2016.

The first quarter decrease in the mainland rate followed three successive 9.7 percent prints and reflected a 0.4 percentage point slide to 8.7 percent in the 25-49-year-old category and a 1.5 percentage point fall to 21.8 percent in youth unemployment. However, at 65.7 percent, employment was only flat on the quarter and up just 0.1 percentage points from a year ago so it was not all goods news.

Still, signs of stronger economic growth should bolster employment prospects this quarter and this will be important if household consumption is to rebound after a disappointingly sluggish start to 2017.

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.