Unemployment in Germany unexpectedly increased in June, according to official data released on Friday, signaling further weakness in Europe’s largest economy.
The unemployment rate rose to 5.7 percent, up from the stable rate of 5.6 percent since March, according to seasonally adjusted figures from the BA federal labor agency. Analysts had predicted that the rate would remain unchanged.
BA chief Andrea Nahles stated that Germany was experiencing the impact of the challenging economic conditions on the labor market.
In absolute terms, the number of unemployed individuals increased by approximately 11,000 compared to the previous month, reaching 2.55 million. The agency also noted that even without considering the arrival of job-seeking Ukrainian refugees, Germany’s unemployment rate would have still risen this month.
The German economy entered a technical recession earlier this year, with two consecutive quarters of contraction amid escalating energy costs and higher interest rates. This has led to a decrease in consumer spending and a decline in demand for corporate and household lending.
Leading economic institutes expect the German economy to shrink by 0.2 to 0.4 percent in 2023. As a result, employers are becoming less desperate for skilled workers, according to KfW chief economist Fritzi Koehler-Geib. This could also alleviate wage demands if job security becomes a growing concern for workers, as stated by ING bank economist Carsten Brzeski.
The European Central Bank (ECB) has expressed concerns about higher wages leading to inflation. Brzeski added that a slight weakening of the labor market could help dampen wage pressures.
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Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
