SA Unemployment: +7k (pan-German), +11k (West), -4k (East)
—

FRANKFURT (MNI) – The upward trend in German unemployment continued
in July, though more slowly than expected as declines in the east offset
increases in the west, while the jobless rate was stable at a 21-year
low, the Federal Labour Office reported on Tuesday.

As a result of this month’s 7,000-person increase, the number of
unemployed came to 2.888 million this month, leaving the seasonally
adjusted unemployment rate at 6.8%, its lowest since 1991.

The majority of analysts in a MNI poll had forecast a stronger
climb in the number of job seekers this month.

In unadjusted terms, the unemployment level climbed by 67,000
persons to 2.876 million, lifting the jobless rate 0.2 percentage point
to 6.8%.

Job vacancies fell by 7,000, adding to June’s 5,000 decline and
suggesting that labour demand may have already peaked. Payroll jobs
data, which lag by one month, rose by 26,000 in June after +34,000 in
May.

Employment as measured in International Labour Office terms had
reached a new record high of 41.6 million in June, according to data
released earlier today.

With the jobless level up for the fourth time in five months, the
labour market may be finally showing the delayed effects of the recent
erosion seen in business activity and sentiment surveys.

The latest PMI survey pointed to the sharpest fall in manufacturing
jobs since early 2010, offsetting the further climb in services to leave
overall private sector employment broadly unchanged this month.

Hiring intentions across most major sectors also lost ground in
July, with only retailers becoming more optimistic, while industry and
construction fell further into negative territory, a European Commission
report showed. Consumers’ jobless fears rose further, though at a much
slower pace than June and remaining well below the long-run average.

The International Monetary Fund forecast an average of 2.7 million
persons unemployed in Germany this year, unchanged from 2011, while the
labour force is expected to grow modestly to 43.6 million.

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

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