SA Unemployment: -20k (pan-German), -18k (West), -2k (East)

MNI survey median: -8k m/m
MNI survey range: -20k to no change m/m
—

FRANKFURT (MNI) – The ranks of the unemployed in Germany resumed a
downward path in November, while job vacancies continued to grow, the
Federal Labour Office reported on Wednesday, citing seasonally adjusted
data.

Some 2.913 million persons were actively searching for work in
November – the smallest number since November 1991 – down from 2.933
million in October, reducing the unemployment rate by 0.1 percentage
point to 6.9%

Nearly all analysts polled had forecast a decline, though only one
had projected such a sharp fall.

In unadjusted terms, the number of unemployed also fell by 20,000,
bringing the total level to 2.713 million – also a 20-year low –
amounting to 6.4% of the labour force compared to 6.5% in October.

Job vacancies increased by 11,000, adding to October’s 8,000 rise,
while payroll jobs, which carry a one-month lag, increased by 26,000
after +20,000 in October.

Unemployment may be approaching a floor, the Labour Office’s
research arm IAB suggested in a recent research paper: “Further
improvement would require significant economic growth.”

After a drop of 270,000 this year, the IAB sees unemployment
falling by an average of 50,000 next year to 2.92 million, assuming GDP
growth of 1.0%. Most of that decline, however, would come from the
statistical carryover of this year’s reduction.

“Overall, the labour market will remain more robust than in
previous crises, but it is unlikely to show the same strong immunity as
in 2008/2009,” IAB said.

Companies no longer benefit as much from the previous wage
moderation and structural adjustments, IAB noted. At the same time, they
have drawn down the financial cushion that allowed them to hold on to
skilled labor during the recession to avoid future bottlenecks and may
be hit harder than in the previous crisis.

Echoing the IAB’s assessment, the European Commission also forecast
only a moderate reduction in unemployment in the near term.

The Organisation for Economic Cooperation expects the jobless
decline to “reverse somewhat” as economic activity slows next year,
though employment should continue expanding over the forecast horizon.

The Commission even warned of possible labour shortages and
resulting downside risks for the German economy.

“In a medium-term perspective, shortages in certain high-skill
segments of the labour market could turn into a major bottleneck for
Germany’s growth potential against the background of the trend decrease
in the working-age population,” it said.

— Frankfurt bureau: +49 69 720 142, email: frankfurt@marketnews.com —

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]