Pre-election German unemployment sees surprise jump
German unemployment has risen by 7,000 in August, despite economist estimates of a 5,000 drop. That sees the unemployment rate unchanged at 6.8 per cent.
Last month German unemployment saw its second consecutive reduction as it fell by 7,000. This is the last Germans jobs number we'll see before the coming election.
Christian Schulz, senior economist, Berenberg:
Due to the Eurozone confidence crisis, Germany’s economy had been relatively weak for almost two years. This has slowed the dynamic labour market as well. But unemployment is also rising a bit because government-sponsored employment programmes have been terminated because they are no longer required. The number of unemployed has risen by 41k in one year, while the number of people in training programmes has fallen by 68k, meaning that unemployment might have fallen by 27k had these measures not been terminated.
With the Eurozone on the right track to recovery, business and consumer confidence rebounding and with the support from the very accommodative monetary policy of the ECB, investment should make a comeback in Germany, leading to more job creation. That may not quickly reduce the number of unemployed, however, as firms struggle to find the required qualifications in the remaining pool of unemployed. Rather, companies will mobilise reserves such as women or older people or attract staff from abroad.