Tags: EU | Germany | Economy

German Jobless Rate Edges Up to 7.6 Percent

Thursday, 29 Jul 2010 01:50 PM

Germany's unemployment rate edged up slightly to 7.6 percent in July from 7.5 percent the previous month as summer vacations started, but the labor market is still on the road to recovery, new data showed Thursday.

A total of 3.192 million people were registered as unemployed — an increase of 39,000 on the month, but a significant improvement compared to July last year, when 271,000 more people were jobless, the Federal Labor Agency said.

In seasonally adjusted terms, the jobless rate slipped to 7.6 percent in July from 7.7 percent in June, and the number of people out of work declined by 20,000.

"Germany's economy is experiencing a recovery, the situation on the labor market has improved further," agency chief Frank-Juergen Weise said.

Labor Minister Ursula von der Leyen called the latest figures "good news," given that the small rise in unadjusted figures could be attributed to the beginning of summer vacations, which slow business activity.

She said there are "good reasons to approach the fall with optimism" as companies have started hiring again.

Economy minister Rainer Bruederle added, "The prospects regarding unemployment are good, so that we will get under the 3 million mark (unemployed) by the end of the year."

Illustrating the improvement, government-subsidized short-time work schemes that kept unemployment from rising sharply during the economic downturn are now being used less.

In May, the latest data available, 481,000 people were still on short-time work schemes, the agency said. At the peak of the recession, the figure was about three times as high.

Alexander Koch, an economist with UniCredit in Munich, said the short-term outlook for the labor market remains positive. "We expect a continuation of the downward trend in unemployment in the second half of this year," he said.

Following the steep recession in 2009, Germany has settled into a recovery as healthier global demand helps its exports. Some economists now forecast that the country's output could grow by 2 percent or more in 2010.

"It remains extraordinary that the largest post-war recession by far has only led to a short-lived spike in joblessness from 3.19 to 3.49 million that has now been largely unwound," said Timo Klein, an economist with IHS Global Insight in Frankfurt.

He cautioned, however, that "the economic recovery remains at risk of a slowdown during the second half of 2010 due to eurozone troubles, related concerns about some banks in Europe, and expected fiscal tightening in many European countries including Germany."

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Economy
Germany's unemployment rate edged up slightly to 7.6 percent in July from 7.5 percent the previous month as summer vacations started, but the labor market is still on the road to recovery, new data showed Thursday.A total of 3.192 million people were registered as...
EU,Germany,Economy
408
2010-50-29
Thursday, 29 Jul 2010 01:50 PM
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