The French labour market remained relatively stable in the fourth quarter of 2024, with the unemployment rate at 7.1 percent. While the number of unemployed individuals declined by 63,000, a sharp rise in the halo around unemployment (138,000) signals hidden labour market distress. Youth unemployment fell by 0.8 percentage points, yet the NEET rate (Not in Education, Employment, or Training) rebounded, highlighting ongoing vulnerabilities in this segment.

The overall employment rate dipped slightly (minus 0.2 points), mainly due to job losses among young workers. However, employment for those aged 50-64 remained at its highest level since 1975, suggesting increased workforce participation among older individuals. Labour underutilisation increased, with 16.6 percent of the labour force either unemployed, underemployed, or in the halo category. Permanent employment declined (minus 0.3 points to 50.8 percent), while self-employment grew slightly. Notably, the activity rate dropped by 0.3 points to 74.4 percent, reflecting a shrinking labour force.

While headline unemployment figures indicate stability, rising inactivity and structural shifts in youth employment suggest deeper challenges in sustaining workforce engagement and economic momentum. The latest update leaves the French RPI at minus 14 and the RPI-P at minus 10. This means that economic activities are slightly lagging behind market expectations in France.

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.

Despite the delay in publication of these data, investors can sense the degree of tightness in the jobs market. If labour markets are tight, investors will be alert to possible inflationary pressures that could exist. If wage inflation threatens, it is a reasonable bet that interest rates will rise and bond and stock prices will fall.