FR: ILO Unemployment Rate

Thu Aug 17 00:30:00 CDT 2017

Actual Previous
Level 9.2% 9.3%

Joblessness in mainland France fell by 20,000 or 0.1 percent on the quarter to 2.651 million in the April-June period. The unemployment rate fell by 0.1 percentage points to 9.2 percent, its lowest level since the first quarter of 2012. Including overseas territories, the rate was 9.5 percent, down from 9.6 percent at the end of the first quarter.

The second quarter decrease extends a gradual decline from the 10.1 percent rate in the third quarter of 2015, which matched the highest point in the unemployment rate since 1997. The small decline was driven by a 0.3 percentage point decline in the 25-49-year-old category to 8.4 percent and a 0.3 percentage decrease to 6.3 percent in the 50 and over group, while youth unemployment slowed the decline by increasing 0.9 percentage points to 22.7 percent.

Most encouraging in the second quarter employment report is a 0.5 percentage point increase on the quarter in the employment rate to 65.3 percent, its highest level since 1980. It rose across all age groups, but most prominently among persons aged 50 to 64.

French unemployment is still in the higher tier of the Eurozone countries and well above the 7 percent levels seen a decade ago. But this report's encouraging employment data confirms signs of fairly strong economic growth and a relative optimistic outlook by business managers that point to continuation of the recovery in employment.

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.