German Unemployment Continues To Fall In October

Source: http://germaneconomy.blogspot.com/2008/10/german-unemployment-continues-to-fall.html
Posted on Thursday, October 30th, 2008 | In Economics, Germany

Contributed by: Edward Hugh (http://globaleconomydoesmatter.blogspot.com) -

German unemployment continued to defy the global financial crisis, and the slowdown in the German economy itself in October, and fell below 3 million for the first time in 16 years, extending its longest drop since reunification. The unadjusted number of people out of work fell to 2.99 million, according to data from the Federal Labor Agency. That’s the first time since November 1992 it breached the 3 million mark and down from a post-World War II peak of 5.3 million in February 2005.

The number of people out of work, adjusted for seasonal swings, dropped 26,000 to 3.15 million after falling 29,000 in September. The seasonally adjusted unemployment rate fell to 7.5 percent, a 16-year low.

According to the latest comparable data from the Organization of Economic Cooperation and Development, Germany’s jobless rate was 7.2 percent in August. France, Germany’s main trading partner, reported 8 percent unemployment compared with 4.1 percent in Japan and 6.1 percent in the U.S. The OECD average was 6 percent.

As the world economy cools in the wake of the financial crisis, that trend will probably reverse and become a political issue next year, when Chancellor Angela Merkel’s Christian Democrats and their Social Democrat coalition partners contest national elections in September.

Employment is normally thought of as a lagging indicator of the economic performance and often benefits from high capacity utilization even as an economy slows. Indications of intended job cuts, such as those which are to be found in, for example, the Ifo business survey, or the PMI surveys need to persist for a number of months before they actually affect the labor market, and then as many of those who become unemployed are in the older age groups they may well disappear from the unemployment statistics altogether as they retire (possibly taking early retirement) and the economically active population falls.

“The weaker economy will have an impact on unemployment, but less so than in the past,” said Frank-Juergen Weise, the head of the Labor Agency. “Policy changes such as the rise of mini-jobs are putting people in registered employment where before they’d be unemployed.”

In a separate release (and based on a slightly different methodology – the monthly labour survey) the Federal Statistics office reported that, after the elimination of typical seasonal variations, the number of persons in employment in Germany stood at 40.36 million in September 2008. Compared with August 2008, that was a seasonally adjusted increase of 21,000 persons (or 0.1%). This compares with a seasonally adjusted average increase of 26,000 persons per month over the last six months.

According to provisional estimates by the statistics office, the number of unemployed was a seasonally adjusted 3.07 million in September 2008. Compared with September 2007, unemployment was down by a seasonally adjusted 450,000 persons or 12.5%. The seasonally adjusted unemployment rate – which is harmonised across the EU and measured as the share of unemployed in the total labour force – amounted to 7.1% in Germany and was thus considerably below the level of the corresponding month of the previous year (8.2%).

Last 5 posts by Edward Hugh

Global Manufacturing, France Outperforms, As Spain Continues To Flounder - November 3rd, 2009
A New Spectre Is Haunting Europe, A Spanish One - October 31st, 2009
Beyond The Consensus On European Bank Credit - October 27th, 2009
The French Rebound Continues In October While Germany Moves Sideways - October 27th, 2009
The French Rebound Continues In October While Germany Moves Sideways - October 27th, 2009

Tags for this Post:
Angela Merkel, Christian Democrats, Economics, European Union, Federal Labor Agency, Federal Statistics Office, France, Frank-Juergen Weise;, Germany, Germany, Japan, Organization of Economic Cooperation and Development, United States

About Edward Hugh (http://globaleconomydoesmatter.blogspot.com)
Edward Hugh is a macro economist, who specializes in growth and productivity theory, demographic processes and their impact on macro performance, and the underlying dynamics of migration flows.

Hugh is a founding member and regular contributor to a number of economics weblogs, including Global Economy Matters, Demography Matters and a number of others.

Edward 'the bonobo' Hugh is a Catalan economist of British extraction based in Barcelona. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again". He is currently working on a book with the provisional working title "Population, the Ultimate Non-renewable Resource".

Edward also writes regularly for the demography blog Demography Matters. He also contributes to the Indian Economy blog . His personal weblog is Bonobo Land . Edward's website can be found at EdwardHugh.net.

Edward follows in detail the Indian, Italian, Spanish, German and Japanese economies. He also has a more than a passing interest in the economies of Turkey and Brazil and in the emerging economies of Eastern Europe.