Germany: Weakness in employment data – ING

Carsten Brzeski, chief economist at ING, notes that the German unemployment increased by 43,900 in August (not seasonally adjusted), bringing the total number of unemployed up to 2.319 million - the highest level since February 2019.

Key Quotes

“In seasonally-adjusted terms, unemployment increased by 4,000, keeping the seasonally-adjusted unemployment rate stable at 5.0%. Still, in unadjusted terms, this is the worst August performance of the German labour market since reunification.”

“The negative impact of the industrial meltdown of the last twelve months has started to spread to other parts of the German economy.”

“Looking at the regional statistics, it is mainly the automotive sector, in which short-work schemes have increased.”

“All of this only means that the protection shield against the industrial slowdown and external woes is getting thinner if not wearing out. This is a stagnation and not a crisis.”

“Total unemployment is still historically low but the trend is clearly not a friend for the German economy these days.”