FR: ILO Unemployment Rate

Thu Feb 15 00:30:00 CST 2018

Consensus Actual Previous Revised
Level 9.0% 8.6% 9.4% 9.3%

Mainland joblessness resumed its downtrend at year-end with a quarterly decline of 205,200 to 2.5 million. This reduced the unemployment rate by fully 0.7 percentage points to 8.6 percent, its lowest reading since the first quarter of 2009. Including overseas territories, the rate was 8.9 percent, also down sharply from 9.6 percent in July-September.

The decline in unemployment was attributable to a healthy 0.6 percentage point rise in the employment rate which now stands at 65.7 percent, its highest mark since the early 1980s. The gain was wholly the result of an increase in full-time positions as part-time jobs declined.

The fourth quarter labour market data are strong and reflect the marked improvement in the real economy seen during the second half of last year. They also bode well for household spending at the start of 2018.

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.