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Germany – Unemployment rate rises for the first time in five years

30 May 2019

Germany’s jobless rate rose in May to 5.0%, up slightly from the previous month’s 4.9%, according to data from the Federal Employment Agency. The uptick in unemployment was the first increase in more than five years.

“We are seeing the first effects on the job market of a slightly weaker economic development,” said Detlef Scheele, the head of the Federal Employment Agency. He said one-off effects contributed to the bulk of this month’s rise.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, told the Financial Times that that the rise was partly due to the reclassification of some workers; however, he said it still represented a slowdown in the country’s labour market.

“The solid German employment picture will not spontaneously combust this year, but the rate of improvement will deteriorate significantly, reflecting the gruelling slowdown in manufacturing,” Vistesen said.

Germany’s unemployment rate is still among the lowest in Europe. It reached a record low of 4.9% in March, the lowest figure since records began for the unified Germany in 1992.

The surveys of purchasing managers in Germany for May saw a decline in activity in the services and manufacturing sectors.