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The German labour market showed further signs of a slowdown as unemployment crept up in July for the fourth month although the federal employment agency (BA) said the job market overall remained “favourable.”
Analysts have been saying for a while that Germany is not likely to stay immune to the euro crisis and the latest job figures by the BA show that seasonally adjusted joblessness in the month rose by 7,000 to 2.89 million while the adjusted unemployment rate reached 6.8%.
The BA explained that joblessness mainly increased because of a “summer break” and was therefore influenced by seasonal developments. However, until April this year the number of people out of work had continuously declined in the country, and even reached an all-time low last year.
Senior ING Bank economist Carsten Bzeski warned the German labour market was “losing momentum.”
“To some extent the labour market has been Germany’s active immunization against the ongoing euro-zone crisis,” he said. “However, signs that this immunization is fading away are hard to miss. Employers have continuously downscaled their recruitment plans and employment expectations in the manufacturing industry have dropped.” But he also said there was no need to panic as the levels of employment in the country were still holding up.
This comes after yesterday’s published unemployment figures by the EU’s statistics body, which showed that in June the number of people out of work rose to the highest level since records began. In the month, Germany still had one of the lowest unemployment rates in Europe, along with Austria, the Netherlands and Luxembourg. But Spain and Greece continue to cause concern amongst politicians, seeing the highest jobless rate in the region.