SA Unemployment: -13k (pan-German), -12k (West), -1k (East)

MNI survey median: -8,000 m/m
MNI survey range: -55,000 to +9,000 m/m
—

FRANKFURT (MNI) – The ranks of the unemployed in Germany fell by
more than generally expected in January, the Federal Labour Office
reported on Tuesday.

The number of people actively searching for work fell by a
seasonally-adjusted 13,000, resulting in an overall level of 3.135
million. Western Germany registered the sharper fall, as the number of
unemployed declined by 12,000, while in eastern Germany, 1,000 fewer
persons were looking for a job.

The decline was enough to cut the adjusted jobless rate to 7.4%. A
vast majority of forecasts had pointed to no change in the unemployment
rate, which had been at 7.5% since September.

In unadjusted terms, the rate went in the opposite direction,
rising to 7.9% last month from 7.2% in December. Without adjusting for
seasonal trends, 331,000 more persons were registered as unemployed on
the month, resulting in an overall level of 3.347 million in January.

Over the same period, job vacancies increased by a seasonally
adjusted 16,000, adding to December’s 10,000 gain.

Payroll job figures, which lag unemployment data by one month,
jumped by 34,000, adding to November’s +30,000 change.

Employment continued to expand at a robust pace in industry and the
services in January, Markit Economics’ purchasing managers index (PMI)
show. Manufacturing payrolls rose at the fastest pace on record. “Strong
job creation has laid the foundation for increased domestic
consumption,” said Markit senior economist Tim Moore.

Hiring expectations also improved in most major sectors in January,
reaching record highs in industry and services, a recent European
Commission survey showed. Retailing was the only sector to see a
decline, though it was down only modestly from the series high.

However, consumers’ jobless fears rose for the second consecutive
month after reaching a trough late last year. Still, unemployment
concerns remained well below the long-run average.

The Ifo institute’s Employment Barometer also rose to a new series
high January due to manufacturing personnel plans. “The labour market
outlook is very good,” Ifo said.

While unemployment is still climbing in some Eurozone states,
Germany’s impressive labour market has left the country with another
problem: labour shortages, which could lead to stronger wage gains.
Labour Minister Ursula von der Leyen predicted last month that wage
levels would rise “noticeably” this year due to “fewer workers
available”.

As some previous wage agreements will still be in effect this year,
pay gains should remain relatively contained. Some 70% of employees
polled by the GfK research group last month expected little increase in
salaries this year and only 6% thought their pay gains would outpace
inflation.

Some unions have demanded large hikes for upcoming wage rounds.
Last week, German Employers Association President Dieter Hundt called
recent pay demands “unrealistic” and “totally illusory”.

Earlier today, the Federal Statistical Office reported that
seasonally adjusted employment had risen to 40.552 million. In
non-seasonally adjusted terms, the number of employed dipped to 40.794
million from November’s 40.921 million record level.

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

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