German Jobless Rate Climbs For First Time Since 2013
May 29 2019 - 4:30AM
RTTF2
Germany's unemployment rate rose in May for the first time since
2013 and the jobless figure climbed sharply for the first time
nearly two years, defying expectations for further decline, and
signaling that the labor market has started to mirror the slowdown
in the economy.
The number of unemployed rose by 60,000 month-on-month, figures
from the Federal Employment Agency showed on Wednesday, while
economists had expected a decline of 7,000. In April, there was a
fall of 12,000. The seasonally adjusted jobless rate climbed to 5
percent in May, equaling the rate last seen in February. Economists
had expected the rate to remain unchanged at the re-unification low
of 4.9 percent logged in each of the previous two months. The
latest increase was the first since November 2013, when the
unemployment rate climbed to 6.9 percent, historical data from
Bundesbank showed. The non-seasonally adjusted unemployment rose by
7,000 persons to 2.236 million from 2.228 million in April. The
first effects of the recent weak economic situation are becoming
evident in the labor market, especially in jobless claims, the
Federal Employment Agency chief Detlef Scheele said in Nuremberg.
The greater part of the latest unemployment increase is
attributable to a one-off effect from audit activities on the
employment status of those receiving jobless benefit, Scheele
added. Demand of companies for new employees is noticeably
weakening, but remains high, the official said. The German economy,
the biggest in the euro area, did manage to avoid a technical
recession by stagnating in the final three months of 2018.
Following that, the economy grew 0.4 percent in the first three
months of the year. However, the near term outlook is bleak for the
German economy, which is manufacturing- and export-oriented, as the
global economy is slowing amid the escalating trade tensions. On
Tuesday, the industrial lobby DIHK cut the growth forecast for this
year to 0.6 percent from 0.9 percent predicted in February.
An alarming detail from the DIHK survey of some 25,000 companies
survey was export expectations, which were the weakest in a decade.
The group predicted further deterioration in the investment and
employment plans in the industrial sector. Last week, a survey by
the ifo Institute showed that German exporters' confidence eroded
sharply in May and morale was particularly weak in the mechanical
engineering sector, where firms expect a fall in export orders for
the first time in over six years.
The latest Purchasing Managers' survey also revealed that
employment growth in the private sector eased to its lowest in just
over three years in April.
AUD vs US Dollar (FX:AUDUSD)
Forex Chart
From Aug 2024 to Sep 2024
AUD vs US Dollar (FX:AUDUSD)
Forex Chart
From Sep 2023 to Sep 2024