In September, the jobless rate was unchanged at 6.7% for the seventh consecutive month, thus standing at a twenty-year low. Conversely unemployment increased by 12K, up for second month in a row. In addition surveys indicated that German companies were unlikely to take on additional workers in September with weaker demand and decreasing backlogs of work.
Employment (published with one-month lag) increased in August, up 91K over the month, recording the largest rise in four months. It was up 0.8% y/y in August, accelerating from 0.6% twelve months ago (see chart).
All in all, the German labour market remains tight in spite of the modest recovery. The favourable employment situation should back household confidence and boost their real disposable income. Nonetheless household confidence is dampened by current geopolitical tensions and economic weakness in a number of Eurozone countries. According to GfK released last week, consumer confidence index was down from 8.9 in August to 8.6 in September. In addition, the overall indicator is forecasting 8.3 in October, recording a second consecutive decline. But consumers still appear to be in a buying mood, according to GfK survey, as the labour market is stable and real income is rising as a result of low inflation.
BY Caroline NEWHOUSE
To Read the Entire Report Please Click on the pdf File Below