German unemployment unchanged but signals weak performance

The German labour market usually picks up in September after the summer, but unemployment decreased much less than usual this month.

German unemployment was stable in September sitting at 6% again, for the fourth consecutive month.

However, the number of unemployed people decreased in real terms by 65,600, although the seasonally adjusted number showed an increase of 17,000, from an increase of 4,000 in August.

Compared to September of last year, the number of unemployed was 179,000 higher while job openings were 65,000 fewer than a year ago.

“Unemployment and underemployment did decrease in September, but significantly less than usual in this month,” said Andrea Nahles Chairwoman of the Board of the Federal Employment Agency (BA) on Friday at the monthly press conference in Nuremberg. “The start of the autumn recovery in the labour market is therefore only sluggish this year.”

Labour data is an important indicator of the real-time situation in the German economy, which contracted in the previous quarter.

“The strong labour market has been an important driver of the economy’s resilience over the last few years,” noted Carsten Brzeski, Global head of macro from ING, adding that “looking ahead, the gradual weakening of the labour market looks set to continue.

Germany’s GDP contracted by 0.1% in the second quarter of the year, and recession fears are mounting as recent economic indicators suggest a sharp worsening of current business conditions and a worsening economic outlook for key industries.