German jobless total rises in September

German jobless total rises in September

30th September 2014, Comments 0 comments

The number of people looking for work in Germany increased in September, as clouds continue to build over Europe's biggest economy, data showed Tuesday, but analysts said the figures were no cause for alarm just yet.

In seasonally adjusted terms, the jobless total increased by 12,000 to 2.918 million this month, data compiled by the national labour office showed, even though analysts had been pencilling in a decline of around 2,000.

The unemployment rate -- which measures the total number of people out of work against the working population as a whole -- was steady at 6.7 percent.

"The German economy contracted by 0.2 percent in the second quarter. Weak exports and investment could not be offset by stable consumption, which means that the continual growth seen in the preceding four quarters was halted," the labour office said in a statement.

"External economic uncertainty is having an increasing effect, notably the conflicts in the Middle East and Ukraine," the office continued.

"The signs for the third quarter are also very subdued. On the labour market, however, demand remains solid," it said.

In raw or unadjusted terms, the German jobless total fell by 94,000 to 2.808 million and the unadjusted jobless rate slipped to 6.5 percent from 6.7 percent, the office calculated.

- No big concern -

Natixis economist Johannes Gareis said the increase in the seasonally-adjusted total was "not a huge concern."

The German labour market "has showed resilience in the course of this year," he said.

"Although (the data) suggest that the German job market have lost a bit of steam recently, it remains in good health," the expert insisted.

At 6.7 percent, the jobless rate was close to a post-reunification low.

"It appears to be too early to start worrying about the underlying growth trend of the German economy," he said.

Earlier, the federal statistics office calculated that retail sales -- a closely watched measure of household confidence -- increased by 2.5 percent in August, the steepest rise since June 2011 and better than analysts' expectations.

BayernLB economist Stefan Kipar said the latest jobless data showed that the German labour market "is feeling the first braking effects" of geopolitical tensions, but "no negative downturn need be expected yet."

"One of the main pillars of the economy, private consumption, remains intact," Kipar said.

- Sideways movement -

"Nevertheless, we expect the labour market to move sideways in the winter months, as long as the external economic environment doesn't improve."

Berenberg Bank economist Christian Schulz was more optimistic.

"There is little sign of the current economic rough patch affecting the labour market yet," he said.

"The current economic slowdown caused by the Ukrainian crisis and other geo-political risks is likely to cool the labour market temporarily. However, in the long run, reform reversals like the partially lower retirement age or the introduction of a national minimum wage will become more important in weakening the dynamism," he said.

ING DiBa economist Carsten Brzeski said the data provided "further evidence that the economy should rebound in the third quarter on the back of strong domestic demand."

While falling confidence indicators "cannot simply be neglected ... the so-called Putin factor is ... more a psychological threat to the German economy rather than a tangible or profound limit to growth," he insisted.

© 2014 AFP

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