SA Unemployment: +20k (pan-German), +16k (West), +4k (East)
—

FRANKFURT (MNI) – The rise in German unemployment matched the most
pessimistic forecasts in October, while the further decline in payroll
jobs points to a further increase in jobless numbers ahead, according to
data released Tuesday by the Federal Labour Office.

The ranks of the unemployed expanded by a seasonally adjusted
20,000 persons in October, the strongest jump since April, bringing the
level to 2.937 million and leaving the jobless rate unchanged at 6.9%.
The median forecast in an MNI survey of analysts had been for a more
modest increase of 12,000 this month.

Without adjusting for seasonal trends, unemployment fell by 35,000
to 2.753 million, leaving the unadjusted rate also unchanged at 6.5%.

Job vacancies declined by 7,000 in October, deepening September’s
5,000 slide. Payroll jobs, the data for which carry a one-month lag,
fell by 8,000 after August’s 20,000 increase.

Earlier today, the Federal Statistical Office reported that
employment, as measured in International Labour Organisation terms, fell
by 15,000 in September, its first slide since February.

The relative resilience of the labour market and positive wage
developments continued to support consumer morale in October, as income
expectations and households’ willingness to spend improved, a GfK survey
noted.

Still, with an Ifo institute survey showing companies’ short-term
hiring expectations well below average and falling further in some
sectors, employment could be shifting toward a downward trend.

The institute’s employment barometer fell for the third consecutive
month in September, reaching its lowest level since mid-2010. “There are
a growing number of signs that isolated companies may reduce their
staffing levels,” Ifo said.

The latest Markit Economics’ PMI polls suggest that the downturn
may have already begun. “Worries about future demand and space capacity
in turn contributed to the first back-to-back monthly contraction of
German private sector employment since the beginning of 2010,” Markit
senior economist Tim Moore said.

Revising down their German GDP growth forecasts for next year, the
country’s leading economic research institutes projected unemployment to
rise to 2.903 million in 2013 from 2.892 million this year. At the same
time, employment would continue to expand, rising from 41.627 million to
41.775 million in 2013.

— Frankfurt bureau: +49 69 720 142, email: twailoo@mni-news.com —

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