German unemployment rate up to 8.2%
Unemployment in Europe’s largest economy rose to 3.43 million, taking the unemployment rate up from 8.1% in December to 8.2% this month.
The jobless total rose by 6,000 people in January but this was less than economists had expected.
According to the Federal Labour Office, the severe snowfall experienced in January put an end to the recent pick up in the labour market.
Carsten Brzeski at ING comments: “The strong winter with heavy snowfall and freezing temperatures has hurt the German labour market, but the fact that seasonally-adjusted unemployment only increased marginally is good news.”
Despite the marginal rise in the unemployment rate, Germany’s job market is much stronger than in many other countries.
Meanwhile, Jennifer McKeown at Capital Economics, added: “January’s increase in German unemployment is a disappointment after recent falls, but labour market conditions still look much better than elsewhere.”
In related news this week, the GfK market research group announced that consumer confidence in Germany is waning after the group’s climate index stood at 3.2 points in February, falling from a revised 3.4 in January.
The forward-looking consumer confidence indicator, which is based on a survey of 2,000 Germans, is being hit by the fear of rising unemployment which is putting incomes under pressure.
This is partly due to the Government’s “Kurzarbeit” scheme, which was introduced to prevent mass redundancies which has seen hundreds of thousands of Germans moved to part-time work.
Germany contracted by a record 5% in 2009 – the first time in six years the economy had shrunk and the deepest since World War II.
The record contraction was due to a slump in demand in exports and investment. In 2009, exports plunged by 14.7% on the year, while investment in equipment fell by one fifth.
The fall in exports also led to Germany losing its status as the world’s largest exporter as China overtook it in this field.
However, Germany was one of the first major economies to exit recession after experiencing positive growth in the second quarter of 2009.
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