Major supply-side constraints and hiring difficulties emerged in late 2017. Though normal during phases of accelerating growth, they nonetheless caught our attention because other indicators are not showing the same degree of pressure. The output gap is a key cyclical indicator. As estimated today, it had not completely closed in 2017, and the low level of core inflation suggests it might have been even more negative. These trends raise the question of France’s position within the economic cycle. Based on our analysis, the French economy has moved out of the recovery phase and growth has peaked, although it is not showing the signs of overheating that typically mark the end-of-cycle period
