The rate of unemployment has fallen below 10 per cent for the first time since 2012, beating expectations.
The rate came in at 9.9 per cent in the second quarter, beating expectations fo 10.1 per cent, and down from 10.2 per cent in the first quarter.
French GDP stagnated in the second quarter, ending three consecutive quarters of expansion.
The news comes at a pivotal time in French politics, with the election to be held next year and President Francois Hollande pledging he would not stand if the employment situation did not improve.
However, he still remains unpopular in the polls.
His centre-left government pushed through controversial labour market reforms using a presidential decree that resulted in protests and unrest.
“I have undertaken policies which are producing results now and which will continue to produce results,” he said earlier this year.
"I ask to be judged on the issue of unemployment."
Protesters have been angry about the reforms which would see the 35-hour week remain, but as an average, meaning firms can negotiate with trade unions on more or fewer hours, up to a maximum of 46.
The reforms also give companies more power to reduce pay, as well as over conditions under which employees can be fired due to economic circumstances and the freedom to negotiate holidays and leave, areas currently highly regulated across France.
Hollande previously said the bill would strike a balance to ensure workers' rights are protected while businesses could become more flexible and competitive.