German Unemployment Falls as Companies Shrug Off Brexit Woes

Updated on
  • Jobless rate unchanged at 6.1%, lowest since reunification
  • GfK study shows 95% of Germans don’t see job at risk post vote

German unemployment extended its decline in July, in a sign that Europe’s largest economy is showing resilience to uncertainty unleashed by Britain’s vote to leave the European Union.

The number of people out of work fell by a seasonally adjusted 7,000 to 2.682 million in July, data from the Federal Labor Agency in Nuremberg showed on Thursday. Economists in a Bloomberg survey forecast a drop of 4,000. The jobless rate remained at a record low of 6.1 percent.

Bundesbank President Jens Weidmann has reiterated that growth in Europe’s largest economy will accelerate in the current quarter and that Brexit hasn’t changed the outlook. A GfK study showed that 95 percent of Germans don’t see their jobs at risk after the U.K. referendum, even as confidence among companies and investors slipped this month in an immediate response to the news.

"The labor market continued to develop positively in July,” Frank-Juergen Weise, president of Germany’s labor agency, told reporters in Nuremberg. “Companies’ readiness to take on new staff remains high.”

The number of people out of work fell by some 4,000 each in western Germany and the eastern part of the country, the labor agency said.

German manufacturing output accelerated in July to the highest level since early 2014, with purchasing managers pointing to a strong labor market and increasing demand as support for the economy. Their confidence may be crucial in absorbing the hundreds of thousands of job seekers set to enter the labor market after the country took in more than 1 million refugees last year.

The impact of that influx is becoming increasingly visible in the data: Unemployment among people from refugee countries such as Syria and Afghanistan jumped by 104 percent in July from a year earlier, the labor agency said. Some 322,000 people with refugee status are now actively looking for a job, with 141,000 of them officially registered as unemployed.