Germany: The unemployment rate unchanged

EcoFlash

In June, the unemployment rate remained unchanged (at 6.8%). However the number of unemployed increased for the third consecutive month in June (+7,000 m/m). Moreover the pace of increase in employment (published with one-month lag) remained lower than last year. Up by 47,000 m/m on average in 2011, it rose by 37,000 m/m in May.

In June, according to the preliminary data released by the Federal Labour Office, the unemployment rate remained unchanged (at 6.8%).

The number of unemployed, at 2.88 millions in June, was down by 2.9% year-on-year. However it increased for the third consecutive month (+7,000 m/m) in June, and the Federal Labour Office revised upwards its previous estimate of unemployed persons by 26,000 between April and June for the previous three months.

The pace of increase in employment (published with one-month lag), slightly rose in May, but it was still low in comparison with the rises recorded until the beginning of the year. Up by 47,000 m/m on average in 2011, it rose by 37,000 m/m in May (after 30,000 m/m in April).

This slowdown, which comes after an increase of employment by more than 1.3 millions since the summer 2009, should persist. Indeed, the moderate economic growth is expected to penalize employment in the coming months. Employment may even decline in manufacturing sector, as the employment component of the PMI, which reached its lowest level since January 2010 in June, remained below the 50-threshold for the third month in a row (at 47.6, after 47.9 in May). However job creation in the service sector will probably offset job destruction in a manufacturing sector, and conditions on the labour market should remain favourable. Tensions have also remained tight for now. Besides, the overall ratio between the number of vacancies and unemployed was still at a high level in June despite a further decrease (to 16.8 after 17 in May). The strength of the labour market should also favour household confidence and consumption.

Published On Thu, Jun 28 2012, 09:35 GMT Previous entries

Catherine Stephan

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Expert in Germany, Austria, Switzerland and Eu Enlargement.

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