German unemployment rose for a seventh month running in May, though the increase was much smaller than expected, partly due to statistical changes, Federal Labour Office figures showed this morning.
Although Germany is in the midst of its sharpest postwar recession, the jobless total rose by just 1,000 month-on-month in May, adjusted for seasonal swings, the smallest increase since unemployment began rising in November, the data showed.
However, the Labour Office said the latest data did not signal a turnaround in the job market and that the adjusted unemployment total would have increased by around 15,000 to 20,000 in May had it not been for the statistical changes.
Germany holds a federal election in September and politicians of all parties are battling to save as many jobs at firms hit by the economic crisis, notably carmaker Opel.
The headline unadjusted unemployment figure - which tends to dominate German media reports - declined by 127,000 to 3.458 million, good for a rate of 8.2 per cent, the Office said.
“The spring pick-up reached the labour market late this year, and has brought about a clear decline in unemployment,” said Labour Office chief Frank-Juergen Weise. “However... there should be no talk of there being a turnaround.”
The mid-range forecast of a Reuters poll of economists was for an adjusted increase of 67,000 from the previous month.
Mindful of the coming election, the government this month extended a state subsidy that enables firms to put workers on shortened hours instead of firing them.
“The labour market instruments are working better than we thought at first," said Andreas Scheurle, an economist at Dekabank in Frankfurt. “Companies are using short time to keep their workforce as much as possible.
New data from the VDMA plant and equipment makers' association today offered a stark reminder that German industry is still suffering from weak global demand.
German engineering orders fell in April by 58 per cent in real terms from the previous year, the biggest decline since records for the sector began, the VDMA said.
Domestic orders fell by 52 per cent, while levels of incoming new work from abroad collapsed by 60 per cent, it said.
Reuters