EMU: Unemployment Rate

Wed Apr 04 04:00:00 CDT 2018

Consensus Actual Previous
Level 8.5% 8.5% 8.6%

The number of people out of work fell a hefty 141,000 to 13.916 million in February. This followed a smaller revised 2,000 decline in January and reduced the jobless rate another tick to 8.5 percent, in line with expectations and its lowest mark since December 2008.

The headline dip was largely due to France (8.9 percent after 9.0 percent), Italy (10.9 percent after 11.1 percent) and Spain (16.1 percent after 16.2 percent), all of which saw their national jobless rates fall further. Germany (3.5 percent) was unchanged but remained at the bottom of the unemployment ladder.

Youth unemployment was more sticky and an 8,000 decrease was not enough to reduce the jobless rate from January's 17.7 percent. However, this was still some 1.7 percentage points below its level a year ago.

In general, the Eurozone labour market continues to make good progress. However, falling unemployment has so far failed to provide the boost to consumer spending that might normally be expected and there is some risk that this will feed back into slower economic growth. The ECB will be hoping otherwise.

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.