Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Thursday, October 30, 2008

German Unemployment Continues To Fall In October

German unemployment continued to defy the global financial crisis, and the slowdown in the German economy itself in October, and fell below 3 million for the first time in 16 years, extending its longest drop since reunification. The unadjusted number of people out of work fell to 2.99 million, according to data from the Federal Labor Agency. That's the first time since November 1992 it breached the 3 million mark and down from a post-World War II peak of 5.3 million in February 2005.

The number of people out of work, adjusted for seasonal swings, dropped 26,000 to 3.15 million after falling 29,000 in September. The seasonally adjusted unemployment rate fell to 7.5 percent, a 16-year low.

According to the latest comparable data from the Organization of Economic Cooperation and Development, Germany's jobless rate was 7.2 percent in August. France, Germany's main trading partner, reported 8 percent unemployment compared with 4.1 percent in Japan and 6.1 percent in the U.S. The OECD average was 6 percent.

As the world economy cools in the wake of the financial crisis, that trend will probably reverse and become a political issue next year, when Chancellor Angela Merkel's Christian Democrats and their Social Democrat coalition partners contest national elections in September.

Employment is normally thought of as a lagging indicator of the economic performance and often benefits from high capacity utilization even as an economy slows. Indications of intended job cuts, such as those which are to be found in, for example, the Ifo business survey, or the PMI surveys need to persist for a number of months before they actually affect the labor market, and then as many of those who become unemployed are in the older age groups they may well disappear from the unemployment statistics altogether as they retire (possibly taking early retirement) and the economically active population falls.

``The weaker economy will have an impact on unemployment, but less so than in the past,'' said Frank-Juergen Weise, the head of the Labor Agency. ``Policy changes such as the rise of mini-jobs are putting people in registered employment where before they'd be unemployed.''
In a separate release (and based on a slightly different methodology - the monthly labour survey) the Federal Statistics office reported that, after the elimination of typical seasonal variations, the number of persons in employment in Germany stood at 40.36 million in September 2008. Compared with August 2008, that was a seasonally adjusted increase of 21,000 persons (or 0.1%). This compares with a seasonally adjusted average increase of 26,000 persons per month over the last six months.

According to provisional estimates by the statistics office, the number of unemployed was a seasonally adjusted 3.07 million in September 2008. Compared with September 2007, unemployment was down by a seasonally adjusted 450,000 persons or 12.5%. The seasonally adjusted unemployment rate – which is harmonised across the EU and measured as the share of unemployed in the total labour force – amounted to 7.1% in Germany and was thus considerably below the level of the corresponding month of the previous year (8.2%).

No comments: