— Adds Comments from Labour Agency’s Frank-Juergen Weise

SA Unemployment: +10k (pan-German), +5k (West), +5k (East)

MNI survey median: -11k m/m
MNI survey range: -20k to -10k m/m
—

FRANKFURT (MNI) – German unemployment unexpectedly rose in October
after 19 months of decline, as the number of jobseekers increased in
both the east and the west, the Federal Labour Office reported on
Wednesday.

The number of people actively searching work rose by 10,000 last
month to 2.941 million persons, boosting the jobless rate by 0.1
percentage point to a seasonally adjusted 7.0%.

Even the most pessimistic forecasts had called for a further
decline in the jobless level, while analysts had expected no change to
September’s 6.9% unemployment rate.

In unadjusted terms, the unemployment rate fell 0.1 percentage
point to 6.5%, reflecting 59,000 fewer persons actively searching for
work. As a result, the total number of unemployed came to 2.737 million.

Job vacancies rose by 7,000 following September’s 8,000 gain, while
payroll jobs, the data for which lag by one month, increased by 18,000
in September.

Indicators still point to further job growth in the near term,
including the Ifo institute’s business climate index, which showed
continued expansive trends in hiring.

The government expects the jobless rate to fall from an average of
7% this year to 6.7% in 2012. “The annual unemployment level will remain
below the three-million level on average this year,” predicted Economics
Minister Philipp Roesler.

However, signs are emerging that even the German labour market is
not totally immune to the slowing global economy. The latest PMIs showed
job growth slowing in both the services and manufacturing sectors.

A European Commission survey showed a falling proportion of firms
looking to add to staff in October. Mirroring this trend, households’
jobless fears intensified, rising to their highest levels since
mid-2010.

Speaking to journalists, the Labour Agency’s Frank-Juergen Weise
said that developments in the labour market would slow, but should
remain “very favourable”. He also projected that if the risks that now
exist materialize, unemployment would likely increase next year.

“But to make this statement right now would be wrong,” Weise
quickly added. “According to the data we now have, it would still be a
good development, though not be as good as it was this year.”

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

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