Unemployment in Germany falls sharply

Image by Mohamed HassanGermany is waking up from its Corona low - and the labor market is also showing clear signs of recovery. In the wake of the spring revival, the number of unemployed continued to fall sharply in May: by 84,000 to 2.687 million. This was announced by the Federal Employment Agency (BA) in Nuremberg on Tuesday.

Unlike in the two previous months, unemployment also fell on a seasonally adjusted basis, and even more sharply than economists had expected: by 15,000. So even despite the usual seasonal fluctuations and the traditionally greater demand for employees in construction or agriculture in the spring, unemployment is falling - a good sign.

"The first signs of a comprehensive improvement in the labor market are emerging in May. Although the consequences of the Corona crisis are still very visible, they are becoming somewhat smaller," said BA Board Chairman Detlef Scheele. This is also reflected in the Corona effect calculated by the Employment Agency, which takes into account how unemployment would have developed without the pandemic. According to this, the consequences of the crisis currently still amount to an increase of 450,000 unemployed - at the peak last spring, the figure was around 638,000. The unemployment rate fell by 0.1 percentage points to 5.9 percent in May.

For the first time since November, when the new containment measures took effect, the number of short-time workers has also declined. According to preliminary extrapolated data from the BA, 2.61 million employees in Germany were on short-time working in March - more recent data is not yet available. In March, the figure was 3.27 million, the highest level so far in the second and third waves. At the same time, however, there are still significantly more people on short-time working than at the height of the global economic and financial crisis in 2009.

An upward trend can also be seen in employment. According to the Federal Statistical Office, around 44.4 million people living in Germany were in employment in April. Adjusted for seasonal effects, this was a slight increase of 10,000; in percentage terms, there was no change. However, the number of people in work is still well below the pre-crisis level: in April, 735,000 fewer people were in work than in February last year, the last month before the start of the restrictions caused by the Corona pandemic in Germany.As the pandemic restrictions are scaled back, employment agencies in Germany expect the labor market to recover significantly in the coming months. The Institute for Employment Research's Labor Market Barometer, based on a survey of all local employment agencies, rose 2.0 points to 104.6 in May.

With regard to unemployment, however, the positive assessment is not based solely on the expectation that more unemployed people will find jobs. According to the IAB, it is also expected that participation in support programs, which have been limited in recent months due to the Corona restrictions, will increase again. Participants in qualification measures, for example, are not considered unemployed in the statistics. In terms of employment, the signs are "pointing to recovery, but record employment growth as in the years before the crisis is not yet in sight," Weber said.

Image by Mohamed Hassan


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