German labor market feels effect of slowing economy

German labor market feels effect of slowing economy

German unemployment unexpectedly rose for the first time in nearly two years in May, data showed on Wednesday, as slowing growth in Europe’s largest economy spilled over into the labor market, reports Trend citing to Reuters

The number of people out of work rose by 60,000 to 2.279 million in seasonally adjusted terms, according to the Federal Labour Office. That compared with a Reuters consensus forecast for a decline of 8,000.

Germany’s solid labor market has been the backbone of a domestically driven upswing in recent years. Several months of rising unemployment could weaken household spending and knock out one of the most important supports for growth.

Though the unexpected rise was mainly due to an audit of the status of some unemployment benefit recipients, the slowing economy also played a role, Labour Office head Detlef Scheele said.

“On the labor market, we can see first spill-over effects of the recently somewhat weaker economic development,” Scheele said. “The demand of companies for new employees is weakening sharply while remaining on a high level.”

He added, however, that the special factor was to blame for roughly two-thirds of the overall jobless rise of 60,000.

The seasonally adjusted jobless rate rose to 5.0%, the data showed. In unadjusted terms, unemployment increased by 7,000 to 2.236 million in May.

Germany’s export-reliant industries are already facing obstacles from trade disputes and uncertainty linked to Britain’s possible chaotic departure from the European Union.

“FAT YEARS OVER”

“All good things must come to an end,” said Thomas Gitzel, chief economist at VP Bank. “This applies also for the job bonanza on the German labor market.”

Gitzel said that industrial companies were curtailing production in light of falling orders, which could be seen in lower demand for temporary workers.

The bleak labor market report comes after a survey showed on Tuesday that consumer sentiment unexpectedly cooled heading into June, falling to its lowest in more than two years.

“The fat years are over,” said Bastian Hepperle from Bankhaus Lampe. “The labor market seems to have reached its zenith.”

He added that overall employment remained relatively high, which should support private consumption and with it the domestically driven growth cycle.

The government last month halved its 2019 growth forecast to 0.5%, which would mark a sharp slowdown following calendar-adjusted growth rates of 2.5% in 2017 and 1.5% in 2018.

KfW analyst Martin Mueller said a temporary increase in the jobless total could not be ruled out. “However, a further reduction in unemployment is expected for the year as a whole,” Mueller said.

“Due to the continuing shortage of skilled workers, the employment opportunities for unemployed people with sought-after qualifications are still excellent,” Mueller said.

In a sign that German employment growth and the development of the jobless total are decoupling, employment as measured by the International Labour Organization climbed to a record 45.11 million in April, seasonally adjusted data from the Federal Statistics Office showed earlier on Wednesday.

Subscribe to Trend in Google News! Subscribe
Georgian PM invited to Eastern Partnership Summit
Georgian PM invited to Eastern Partnership Summit
Georgia to receive special PCR tests to detect new Omicron variant of coronavirus
Georgia to receive special PCR tests to detect new Omicron variant of coronavirus
Georgia boosts honey exports
Georgia boosts honey exports
Loading Bars
Latest
US to strengthen travel restrictions
IAEA says Iran begun using advanced centrifuge at Fordow
Nureddin Nebati replaces Elvan as Turkey's new finance minister
Iran, Russia to speed up construction of International North-South Corridor
Uzbekistan tightens quarantine measures for people coming from Germany, UK and 9 other countries
Georgian PM invited to Eastern Partnership Summit
Ireland reports first case of Omicron variant
Amazon invests in 274 renewable energy projects globally
World Bank backs using $280 mln in frozen aid funds for Afghanistan
Cavushoglu, Blinken discuss situation in Azerbaijan and Armenia
Alec Baldwin on fatal movie set shooting; ‘I didn't pull the trigger’
Afghanistan's GDP likely to drop 20 pct in one year: UN
UAE reports its first case of COVID-19 variant Omicron
Moderna exec says company could have Omicron booster ready in March
UN says international migration rose last year despite Covid-19 impact
Kyrgyz border service reports shots from Tajikistan
Bennett declares ‘Yamam’ Israel’s national counterterrorism force
Transport infrastructure in Karabakh to turn Azerbaijan into logistics hub between Central Asia and Europe – CAERC
Four injured after old WWII aircraft bomb explodes in Munich - police
1st US case of COVID-19 omicron variant identified - Fauci
OPEC can elect new secretary general in January 2022 — source
President Erdogan talks bilateral relations with Crown Prince of UAE
Georgia to receive special PCR tests to detect new Omicron variant of coronavirus
Qatar Airways to launch flights to Uzbekistan from Jan 17, 2022
Iran military clashes with armed men on Afghan border
Armenia found itself in complete military-political isolation even within CSTO - Russian military expert
Net foreign assets in Azerbaijan grow for 10M2021
New geopolitical situation in region opens way for Azerbaijan’s further development - ambassador
Ambassador of Kazakhstan expresses condolences to Azerbaijan due to helicopter crash
Azerbaijan working on reconstruction railway line which is part of Zangazur corridor (PHOTO)
SOCAR’s STAR refinery tests numerous types of crude oil
Azerbaijan considering sending medical workers of Baku clinics to district hospitals
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,795 more COVID-19 cases, 1,967 recoveries
Azerbaijani National Depository Center opens tender to buy new generation security system
Georgia boosts honey exports
Solar PV growth to surpass wind in EU in 2021-2026
Servicemen injured in Azerbaijani helicopter crash talk about incident (PHOTO/VIDEO)
Turkmen company exports paper products to Uzbekistan, Turkey
Iranian companies express readiness to restore factories in Syria - minister
Azerbaijani, Armenian FMs to meet in Sweden
President Ilham Aliyev receives EU Special Representative for South Caucasus (PHOTO/VIDEO)
US Marshall Legacy Institute sends eight more mine detection dogs to Azerbaijan (PHOTO)
Iran’s Bahar Azadi gold coin price rebounds
Azerbaijani agency shares data for mine detection, clearing work in liberated territories
Central Bank of Azerbaijan opens tender to insure fixed assets
Azerbaijan’s 10M2021 oil exports to Spain revealed
Uzbek Statistics Committee shares data on volume of retail trade turnover
Georgian medics advise reconsidering COVID-19 passports issuance
Overview of Uzbekistan's volume of wholesale trade turnover dynamics between 2010-2020
Price indexes of construction, trade sectors at Uzbek stock exchange fall
Georgia, IMF discuss new co-op program
Prices for goods and services in consumer market of Uzbekistan rise
Turkey’s diesel fuel exports to Georgia down
Georgia, NATO discuss further co-op and Black Sea security
Iran bans import of musical instruments due to lack of foreign exchange resources
Turkmen ministry prolongs tender for supply of metal blanks
IRENEX shares data on sales of Tabriz Oil Refining Company
Activities in Iran’s Imam Khomeini port down
Star Refinery satisfies about quarter of Turkey's refined petroleum product needs - CEO
Kazakhstan’s oil and gas company opens tender to supply fittings
Mobile phones rank first in Iran’s total imports - IRICA
Turkmenistan’s education ministry extends tender for setting drip irrigation system
Oil minister tells president, parliament that Iran's oil exports 'significantly grow'
Azerbaijan, Pakistan talk prospects for development of military co-op (PHOTO)
Azerbaijan's SOCAR Polymer exports increase over 10M2021
Iran unveils volume of dates export
Iran’s CBI reveals data on balance of bank loans
EU to exceed current renewable capacity plans for 2030
Azerbaijan reveals oil exports to Italy in 10M2021
Azerbaijan shares data on oil export to Croatia in 10M2021
Baku Metro provides ‘November 8’ station with backup power supply (Exclusive) (PHOTO)
Renewable electricity generation to exceed average annual growth rate of 2015-2020
Expansion of bioenergy for power capacity to slow down
Renewable energy capacity to expand by 2026, says IEA
Azerbaijan talks ongoing work to provide electricity to liberated Lachin district
Special representative of Azerbaijan's President in liberated territories within Karabakh economic region appointed
German Ambassador expresses condolences to Azerbaijan over deadly helicopter crash
Iran, Syria sign four cooperation agreements
Iran to invest in Syrian industrial towns
Austria extends COVID-19 lockdown by 10 days
Branch of Azerbaijan’s Balakhani Operating Company opens tender to buy pipes, pumps
Baku electric company opens tender to buy materials for lamp posts repair
Organization of social zone of Aghdam Industrial Park completes in Azerbaijan – minister
Deputy Prime Ministers of Azerbaijan, Armenia and Russia to meet in Moscow today
Azerbaijan’s Azerishig opens tender for reconstruction of substation in Sumgayit
Kazakhstan increases trade with India over 9M2021
Nar continues to grow IT professionals (PHOTO)
India provides medical, humanitarian aid to over 150 countries to deal with COVID-19: MEA
Georgia receives COVID-19 support grant from German Development Bank
Turkey-Azerbaijan trade turnover grows in October 2021
Kazakhstan reports increase in maritime transport volumes
SOCAR Petroleum to open new petrol station in Azerbaijan’s Gubadli district
SOCAR Georgia Gas increases gas tariffs
Iran reveals COVID-19 data for December 1
Azerbaijan discloses data on oil exports to Israel
Georgian cities receive EU grant for cultural development
Saudi Arabia reports first Omicron case coming from north Africa
Georgian FM expresses condolences for lives lost in crash of military helicopter
PMO records increase in cargo movements in Iranian ports
All news