Unemployment in Germany rises in August – but not due to coronavirus

Unemployment in Germany rises in August - but not due to coronavirus
A sign lights up Germany's Agentur für Arbeit in Oldenburg. Photo: DPA
German unemployment inched up slightly in August, official data showed Tuesday, as Europe's largest economy adapted to life after lockdowns imposed to curb the coronavirus pandemic.

The jobless rate ticked up slightly to 6.4 percent from 6.3 percent in July, the BA federal labour agency said, signalling a plateau after a marked rise in unemployment in the early period of the pandemic.

Before the coronavirus struck, unemployment had hovered at around five percent, record lows since reunification. In August 2019, unemployment was 5.1 percent.

The BA blamed the summer break for the rise in unemployment in August.

“Unemployment rose at the usual rate in August, meaning there was no additional coronavirus-related increase in unemployment from July.

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Nevertheless, the effects of the pandemic on the labour market are still very clearly visible,” said Detlef Scheele, chairman of the labour agency.

Unemployment may continue to rise as companies restructure and the post-corona economy takes shape. German carrier Lufthansa, Europe's largest airline by passengers, said it may cut 22,000 jobs and tour operator giant TUI says it will lay off 8,000 workers.

READ ALSO: German giant TUI to slash 8,000 jobs over coronavirus crisis

The impact of the crisis on the job market has been cushioned by Germany's
shorter hours programme, known as Kurzarbeit, in which the government tops up
workers' wages when their working hours are cut.

After an initial surge to 10.6 million in March and April combined, the numbers of new applications for the scheme have come down significantly.

Around 5.4 million people were on Kurzarbeit in June, according to the BA, still considerably higher than at the height of the financial crash in 2009.

There were 170,000 new sign-ups to the scheme in August, it added.

READ ALSO: Kurzarbeit: Germany extends reduced hours work scheme

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