Economic crisis boosts German unemployment
Published on: 01 Sep 2009 10:46 CET
Adjusted for seasonal factors, the Federal Labour Agency said the number of unemployed rose by 9,000 people from July to a total of 3.47 million, with a government scheme to subsidise shorter working hours “stabilising the labour market.” Compared to the same month last year, there are 276,000 more jobless people.
“Repercussions from the economic crisis were felt in August on the labour market,” a statement quoted labour agency president Frank Weise as saying.
Analysts polled by Dow Jones Newswires had forecast an increase of 30,000 unemployed workers and a jobless rate of 8.3 percent.
On Monday, Labour Minister Olaf Scholz said in Der Spiegel magazine that unemployment would keep rising in the coming months, but remains below four million.
“The economic collapse will of course lead to a jump in unemployment in the coming months,” Scholz said, before adding that “this year we will stay under the four million mark.”
A state scheme, known as Kurzarbeit, subsidising firms to cut working hours has thus far prevented a flood of jobless claims but experts warn that a steady trickle in recent months could soon become a deluge.
"The strength of the labour market will put to the test in the coming weeks when the first wave of short-time work arrangements will reach their 'sell-by date'," ING senior economist Carsten Brzeski said.
Capital Economics economist Jennifer McKeown noted that "the government subsidy, which encourages firms to retain workers for shorter hours, runs out after a maximum of two years. "We fear that sharper increases in unemployment are to come in future," she said.
According to an assessment by German newspaper Welt am Sonntag, the 30 companies on Frankfurt's DAX index of blue-chip stocks have axed a total of 50,000 jobs, including 30,000 in Germany, from October 2008 to June 2009.
But Germany has rebounded with unexpected speed from its worst recession in more than six decades, edging back to growth in the second quarter of this year with an expansion of 0.3 percent.