FRENCH ECONOMIC STATS
The good, the bad, and the ugly – A summary of the big three in France’s economy: Unemployment, retirement, and inflation
In honor of “weekly strike day” (I’m kidding. All love, France), I thought I would provide a few statistics to encourage, forewarn and inform.
First, let’s take a look at the good: Unemployment. Unemployment in France has been on a steady decline since its recent peak of 8.8 percent in the third quarter of 2020.[1] The latest numbers from the fourth quarter of 2022 reveal current rates at 7.0 percent. This is encouraging considering that 6.9 percent from the first quarter of 2008 is the lowest rate of unemployment in France in the past 20 years.
Next, let’s look at bad: Retirement. As strikes surrounding reforms continue, I mentioned in my last post that the current average age of retirement in France is 64.5. Reforms from 62 to 64 will almost certainly push back the average age by at least two years. Compounding the issue is the reduction in the number of workers per retiree from 1.8 in 2009 to 1.6 in 2020,[2] which is foreboding since birth rates continue to decline and life expectancy continues to increase (with a slight dip in 2020 due to the pandemic).[3] [4]
Last, the ugly: Inflation. Official numbers show a sharp increase of 3.6 percent between 2021 and 2022, peaking at 5.2 percent.[5] Some estimates are as high as 7.2 percent.[6] This is due in part to the ongoing conflict in Ukraine but is related to the drop in unemployment. Inflation normally has an inverse relationship with unemployment. When inflation rises, unemployment drops. We may be witnessing what is known as demand-pull inflation, as the demand for goods or services rises faster than the supply. Time will tell.
I hesitate to give opinions or advice on any of the above subjects. These are simply data points for the reader to review for informed decisions. Be informed and be encouraged. – M
[1] https://www.insee.fr/fr/statistiques/4805248#tableau-chomage-g1-fr
[2] https://www.insee.fr/fr/statistiques/2415121#tableau-figure1
[3] https://www.insee.fr/fr/statistiques/2381380#tableau-figure1
[4] https://www.insee.fr/fr/statistiques/2416631#tableau-figure1
[5] https://www.insee.fr/fr/statistiques/2122401#tableau-figure1