Germany’s jobless rise in August
Berlin, Germany (4E) – Germany’s Federal Labor Office announced on Thursday that August saw a rising number of Germans who are unemployed by a seasonally-adjusted figure of 9,000 to reach 2.90 million. This is higher than what most economists estimated of 7,000 to 8,000.
The German labor market is starting to feel the pinch of the slowing growth in Europe due to the debt crisis as jobless claims are also on the rise.
Europe’s problems are also hitting hard the German economy as shown in the slowing economic growth. The country’s GDP grew at a slower pace in the second quarter at 0.3 per cent compared to 0.5 per cent during the previous three months.
In Germany, the summer season usually see unemployment soar as more young people end schooling or vocational training. Also, many companies delay their recruitment of new staff until the summer ends. Despite these seasonal factors, Germany’s unemployment numbers continue its trend upward, according to the labor agency.
The debt crisis remains the biggest reason for softening European demand for goods and declining outlook for growth and corporate earnings, resulting to less hires and investment in the German economy. Unemployment was moving at a declining rate for almost two and a half years straight until April this year. Europe’s largest economy, however, has so far weathered the crisis with wages still rising and unemployment at its lowest levels since the 1990s.
A major German economic institute earlier this month predicted its lowest economic outlook for Germany this year in the month of August — the fourth straight month of declining growth. This could be an indication that the next six months would see tempered economic activity.
The economy’s domestic demand is now being affected by dampened business confidence and shrinking consumer disposable income. Global economic growth is also hammered by the faltering global economic recovery which has affected German exports.