Unemployment in Germany rock-steady at historic lows

Unemployment in Germany rock-steady at historic lows
Photo: DPA
Unemployment in Germany held steady at historic lows in October, official data showed Thursday, suggesting Europe's largest economy can look forward to continuing good health.

The jobless rate stood at 5.6 percent in seasonally-adjusted terms last month, the Federal Labour Agency (BA) said in a statement, the same level as in September.

In unadjusted terms, the rate fell 0.1 points to 5.4 percent – the lowest level since German reunification in 1990 – or just under 2.4 million people.

“A strong economic upturn in autumn lowered unemployment and underemployment in October more strongly than usual,” BA chief Detlef Scheele said.

Low unemployment has favoured economic growth in Germany by increasing domestic demand for goods.

Surveys show the public believe their prosperity will continue to grow, giving them the confidence to spend money.

In a virtuous circle, consumer spending stokes growth at companies, which then have the resources to hire more workers.

“The strong labour market remains an important growth engine, but also shows why significant wage increases in the entire eurozone are still way off,” said economist Carsten Brzeski of ING Diba bank.

Many of the jobs created have been low-wage positions, often in the health or social care sectors, Brzeski noted.

Threats from globalisation, automation and digitalisation mean workers in Europe are often more concerned with holding down a job than pushing for wage increases.

Slower pay rises mean slower inflation – a headache for the European Central Bank, which has embarked upon a series of unprecedented policy measures in recent years to prop up the eurozone economy and drive up inflation to closer to its target of just below 2.0 percent.

Jobs in Germany