Berlin - German unemployment rose less than forecast in
June, official data released Tuesday showed, with the labour market
in Europe's biggest economy managing to weather the recession better
than expected.
While the Federal Labour Agency said seasonally adjusted
unemployment, which reflects overall trends in the job market,
climbed by 31,000 this month, in the politically important unadjusted
terms the numbers out of work fell. Analysts had forecast a 45,000
rise in the seasonally adjusted unemployment.
'The labour market remains the bright spot of the recovery,' said
ING Bank Carsten Brzeski. 'Interestingly, looking at earlier
recessions in Germany, the labour market has progressively become
better-equipped to weather an economic downturn.'
Experts generally expect the nation to face a surge in the numbers
out of work as the global recession hits the German jobs market.
The Paris-based Organization for Economic Cooperation and
Development has forecast that German unemployment will hit 11.6 per
cent in 2010.
In seasonally adjusted terms, the unemployment rate edged up to
8.3 per cent in June from 8.2 per cent in May.
'The steep decline in economic growth has not resulted in the
expected dramatic rise in unemployment,' said German Labour Minister
Olaf Scholz following the release of the latest labour market
figures.
But signs of increasing unemployment also raise the risk of
Chancellor Angela Merkel's government heading into September's
general election against the backdrop of lengthening jobless queues.
While in the politically important unadjusted terms, the numbers
out of work fell 48,000 to 3.41 million, the decline was less than
during the same period in previous years, when employers often boost
their workforces.
Indeed, there were 250,000 more jobless in June this year than in
the same month last year.
The seasonally unadjusted unemployment rate slipped from 8.2 per
cent in May to 8.1 per cent. A year ago the rate stood at 7.5 per
cent.
Up until now, government subsidized short-term work contracts have
helped companies avoid mass layoffs despite the weakening economic
environment.
But economists have warned that the numbers out of work could
climb to 4.1 million by the end of 2009. The German economy is
expected to contract by a dramatic 6 per cent plus this year.
At the same time, the number of job vacancies fell by 18.9 per
cent in June compared with the same month in 2008.
This underscores concerns around the world that the economic
crisis could transform itself into a jobs crisis by the end of the
year.
The rise in German unemployment comes also despite a steady stream
of forward-looking economic sentiment surveys pointing to
expectations of a turnaround in both the European and the German
economies as the year unfolds.
However, bleak economic data continues to roll in, underscoring
the fallout for Germany as a result of the global recession, with
factory order books, as well as production, shrinking and exports
slumping.
Indeed, Berlin now expects the nation's jobless queues to swell by
450,000 to average 3.7 million this year before jumping by 900,000 to
about 4.7 million in 2010.
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