adminFRANKFURT. – German unemployment registered a small unexpected rise in August, as government-sponsored job schemes were wound down, but the labour market remains stable overall, official data showed yesterday. With less than a month to go before the German general elections, the Federal Labour Office calculated that the number of people registered as unemployed in Europe’s top economy increased this month.
But analysts believed the figures were nothing for Chancellor Angela Merkel to worry about in her bid for re-election on September 22.
According to the labour office data, the jobless total edged up by 7 000 to 2,943 million in seasonally adjusted terms in August. Analysts had been expecting a drop of around 5 000.
Nevertheless, the unemployment rate – which measures the proportion of people out of work compared with working population as a whole – was unchanged at 6,8 percent this month in seasonally-adjusted terms, the Federal Labour Office said.
The slight increase in the jobless total was “mostly due to fewer job relief measures in labour market policy,” the office said.
“Overall, developments on the labour market can be described as stable.”
In raw or unadjusted terms, the German jobless total rose by 31 600 to 2,946 million, while the unadjusted jobless rate was
also steady at 6.8 percent, the office calculated.
Postbank economist Heinrich Bayer said: “We wouldn’t see the data as any great disappointment. Over the past few months, the jobless number has remained more or less steady, as is reflected in the unchanged jobless rate.”
The labour market was “a lagging economic indicator, which is about six months behind the real economic development. If the economic recovery gathers momentum, then the labour market will gain pace again in the coming months”, Bayer said.
“Unemployment is rising a bit because government-sponsored employment programmes have been terminated as they are no longer required,” said Berenberg Bank economist Christian Schulz.
“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 European Central Bank, investment should make a comeback in Germany, leading to more job creation,” the expert said.
Caroline Newhouse at BNP Paribas also believed that the German labour market “should benefit from the current recovery in the eurozone”.
The unemployment data “should not threaten Chancellor Angela Merkel a month before the general elections”, said Dimitri Alexopoulos at Natixis, who pointed out that at 6,8 percent, the jobless rate was at its lowest level since unification.
Timo Klein at IHS Global Insight similarly believed that “overall, labour market conditions continue to be much healthier in Germany than in most other countries in Europe, and there has been only a modest dampening effect of the eurozone debt crisis on employment.
“On balance, unemployment should revert to a modest downward trend during the remainder of 2013,” Klein predicted. -AFP.
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