High German jobless keepspressure on Schroeder

8th June 2004, Comments 0 comments

8 June 2004 , NUREMBERG - German Chancellor Gerhard Schroeder is facing the build-up to key European elections this weekend with official data released Tuesday showing unemployment in Europe's biggest economy at over 10 percent. While the Federal Labour Office said that unemployment in the country dropped by 150,200 in May to an unadjusted level of 4,293,100 in May, the more market-sensitive adjusted figures showed joblessness in the country rising by 9,000 to 4.374 million during the month. The weak state

8 June 2004

NUREMBERG - German Chancellor Gerhard Schroeder is facing the build-up to key European elections this weekend with official data released Tuesday showing unemployment in Europe's biggest economy at over 10 percent.

While the Federal Labour Office said that unemployment in the country dropped by 150,200 in May to an unadjusted level of 4,293,100 in May, the more market-sensitive adjusted figures showed joblessness in the country rising by 9,000 to 4.374 million during the month.

The weak state of the labour market is despite leading economic sentiment surveys and crucial factory order books and production data pointing to a recovery taking hold in Germany.

But although the May increase in the seasonally adjusted number was less than the 36,000 rise forecast by economists, the scale of the economic recovery presently underway in the nation still appears to fall short of the impulse needed to help roll back Germany's record high unemployment levels. In seasonally adjusted terms, unemployment now stands at 10.5 percent.

Releasing the data, labour office president Frank-Juergen Weise said the May decline in the unadjusted figures was solely due to seasonal factors adding that Germany's economic upturn was still too weak to give any boost to the jobs market.

Echoing his comments, Ralph Solveen, economist with Commerzbank AG said "the May numbers confirm once again that the improvement in market conditions has not yet reached the job market."

Moreover, instead of launching hiring drives employers appear focused on cutting costs in the wake of the euro's surge earlier this year and more recently, the jump in oil prices with the labour office data also showing employment in the country slumping by 33,000 in March. This was the biggest drop in more than a year and followed a 22,000 fall in February.

After three years of economic stagnation and unpopular government moves to reform Germany's welfare state, opinion polls show Schroeder's Social Democrats trailing badly behind the conservative opposition Christian Democrats in the run-up to Sunday's European elections.

Tuesday's data did contain some positive news with the number of job openings increasing by 3,000 in May to record the first rise in vacancies since the middle of last year.

However, economists are not expecting much improvement in the job market in the coming months with the German economy tipped to grow this year by a very modest 1.5 percent, which is below the two per cent mark that many analysts believe is necessary to create jobs in the nation.

Laurenz Meyer, the general secretary of the main opposition Christian Democrats seized on the latest figures saying that as long as there was no change in German economic policy the monthly unemployment data would continue to be a disaster for the government.

However, German Economics and Labour Minister Wolfgang Clement insisted that the jobs data confirmed that the government's reform agenda was on the right course and that young people in the nation would have a better employment perspective.

Clement said that since January 233,000 had taken advantage of the government's reforms to establish their own businesses as an alternative to unemployment.

But having chalked up several big falls following the launch of Schroeder's labour market reforms, seasonally adjusted unemployment has averaged a rise of 30,000 in the three months prior to May.

While unemployment in western Germany stood at 8.2 percent in May, it came in at 18.3 percent in the eastern part of the nation.

DPA

Subject: German news

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