EMU: Unemployment Rate

Tue Jan 09 04:00:00 CST 2018

Consensus Actual Previous
Level 8.7% 8.7% 8.8%

Joblessness fell a further 107,000 to 14.263 million in November. This followed a steeper revised 97,000 drop in October and leaves the number of people out of work down some 1.661 million from a year ago. The unemployment rate was 8.7 percent, in line with expectations and a tick below its reading at the start of the quarter. It was also its lowest mark since January 2009.

November was generally a good month for the larger Eurozone countries with national jobless rates down 0.1 percentage points in France (9.2 percent), Germany (3.6 percent) and Italy (11.0 percent). Spain was the exception as the rate there was only unchanged (16.7 percent) although even that was some 2 percentage points short of its level a year ago.

There was also good news on youth joblessness which fell 22,000 after an 18,000 decline last time.

The tightening labour market is consistent with what looks to be an increasingly robust Eurozone real economy. However, while the German rate is at a post-Reunification low, unemployment in France, Italy and Spain remains high. This warns that the output gap may have to close a good deal further before there is any real impact on wages and, without this, underlying inflation in the region is set to remain sluggish.

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.