France: Unemployment back under 10% - ING

Julien Manceaux, Senior Economist at ING, notes that the French figures just published by the INSEE show that unemployment went down by 0.4ppt in the first quarter, reaching less than 10% for the first time since 2012.

Key Quotes

“At 9.6%, it certainly remains a challenge for Mr Philippe’s new Government. Its members are known since yesterday, a choice that respects a very delicate equilibrium between right and left, men and women, politicians and civil society members. At this stage, the main question is if it will survive the June legislative elections.”

“This morning, ILO figures showed that unemployment decreased by 0.4ppt in France in the first quarter, despite the very disappointing GDP growth rate (which slowed from 0.5% to 0.3% QoQ in 1Q17). Unemployment went below the 10% threshold for the first time since 2012, at 9.6% in the first quarter. The trend is yet to be confirmed in coming quarters however, as the unemployed population increased by 41k in the first quarter after having declined by 60k in the second half of 2016.”

“The move was mainly due to the fact that one part of the population under training or subsidized jobs reintegrated the main unemployment statistics as they failed to find a job after this period. This illustrates the weakness of the subsidized system: without a strong recovery in private sector job creation, it can only be a temporary success. These difficulties were illustrated this morning by ILO data showing that the employment rate failed to increase among the active population it remained at 64.7%. Finally, figures released this morning showed in particular that unemployment among the youngest workers (15-24 y.o) remains very high at 21.8%.”