German Unemployment Rises a Third Month as Growth SlowsJeff Black
German unemployment rose for a third month in October, adding to signs of a slowdown in Europe’s largest economy.
The number of people out of work climbed a seasonally-adjusted 2,000 to 2.97 million, after gaining by a revised 24,000 in September, the Nuremberg-based Federal Labor Agency said today. Economists predicted no change, according to the median of 36 estimates in a Bloomberg News survey. The adjusted jobless rate was unchanged at 6.9 percent.
The German economy, which helped to pull the 17-nation euro area out of recession in three months through June, probably expanded at a slower pace in the third quarter, the Bundesbank said on Oct. 21. Sentiment among companies on the economic outlook dipped for the first time in six months in October amid uncertainty over the pace of the recovery in the currency bloc, Germany’s biggest trading partner.
“Survey indicators are weakening a bit and the big concern that we have is that even German companies are not investing that much,” said Anatoli Annenkov, senior economist at Societe Generale SA in London. “If we have continued growth in the third and fourth quarter, we can start to look forward to continued improvement in the labor market.”
Unemployment in East Germany rose by 2,000, leaving the jobless rate unchanged at 10.3 percent. The number of people out of work in West Germany was unchanged and the rate stayed at 6.1 percent. The national rate of 6.9 percent is near the lowest level in two decades.
“Demand for labor has stabilized at a good level in recent months,” the Labor Agency said in a statement.
The euro was little changed at $1.3763 at 10:50 a.m. Frankfurt time. Germany’s DAX stock index was up 0.5 percent at 9,065.95.
German gross domestic product probably increased 0.4 percent in the third quarter after climbing 0.7 percent in the three months through June, according to Bloomberg’s monthly survey of economists published Oct. 10. The economy will expand 0.5 percent in 2013 and 1.8 percent next year, the survey showed. The Bundesbank forecasts growth of 0.3 percent and 1.5 percent, respectively. The Federal Statistics Office is due to publish preliminary GDP data for the third quarter on Nov. 14.
Bilfinger SE, Germany’s second-biggest builder, said on Sept. 20 that it plans to cut 1,250 office jobs over the next two years by merging units in an effort to reduce annual costs by at least 90 million euros ($124 million).
The BDA employers federation says a minimum wage of 8.50 euros an hour proposed by the nation’s Social Democrats will cost jobs and the group is considering legal action to prevent it, Stuttgarter Zeitung reported Oct. 25.
The Social Democrats are demanding the minimum wage as the price to form a coalition with Chancellor Angela Merkel’s Christian Democrats. The parties have entered their second week of negotiations, more than five weeks after Merkel won elections.