France: Unemployment likely to decline until the end of the year – ING

According to Julien Manceaux, senior economist at ING, France’s unemployed population figures published this morning should feed the optimism as it has been suffering from the lagged impact of the yellow vest crisis in recent months, with a cumulative increase of 20,500 between May and July.

Key Quotes

“In that sense, the August drop of 20,100, the largest since the end of 2018, is a sign that things are improving again. Meanwhile, the September business confidence survey in the service sector showed the highest hiring intentions of 2019. This should lead to another drop in the unemployment rate in 3Q19, albeit at a slower pace than earlier this year, from 8.2% to 8.1%.”

“We expect the fall in unemployment to come to an end in early 2020, but it will continue in the coming months (to levels below 8.0%), supporting confidence and tempering saving plans. Worries about consumer spending will probably return early next year, but for now, it is too soon to call the end of the party.”