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German unemployment dips as mild winter combines with economic upturn

German unemployment dips as mild winter combines with economic upturn

Germany's unemployment rate dipped to 8.6 percent in February as a relatively mild winter added to momentum from the country's economic upswing, government figures showed Thursday.
The number of people without a job in Germany, Europe's biggest economy, was down 42,000 from January at 3.617 million, and 630,000 lower than in February last year, the Federal Labor Agency said.
The unadjusted jobless rate was down from 8.7 percent in January. Last February, that rate was still in double figures, at 10.1 percent.
"Unemployment continues to fall," Labor Agency chief Frank-Juergen Weise said. "Companies' demand for labor remains at a very high level."
The agency partly credited the "so far relatively mild winter" for the improvement, but also pointed to the creation of jobs as the economy improves. Harsh winter weather typically adds to jobless figures in construction and other sectors.
In seasonally adjusted terms, the unemployment rate declined to 8 percent from 8.1 percent in January.
That reading was in line with economists' expectations, but a seasonally adjusted decline of 75,000 in the total number of people out of work beat the 40,000 forecast by analysts surveyed by Dow Jones Newswires.
Alexander Koch, an economist at UniCredit in Munich, said that was the 23rd consecutive monthly decline in seasonally adjusted unemployment.
But he noted that the mild weather and a new short-term winter benefit for construction workers "likely considerably supported" labor market data over the winter, "thus overstating the latest dynamic on the German labor market."
After two years of healthy economic growth, the economy is expected to cool this year. However, Koch said, "overall employment expectations remain clearly expansionary so far, arguing for another year of a substantial decline in unemployment of around 300,000."
The upbeat unemployment figures came during a week in which Germany has seen several high-profile announcements of job cuts.
Automaker BMW AG said it would cut another 5,600 jobs this year as it moves to pare expenses; household goods manufacturer Henkel KGaA said it likely would eliminate as many as 3,000 jobs; and Siemens AG said it would cut 3,800 jobs as it reorganizes its corporate telecommunications unit.
That, along with Nokia Corp.'s decision last month to shut a German manufacturing plant, has generated anger over companies cutting jobs despite healthy earnings.
"It cannot be that a company has a rate of return of 20 percent and at the same time cuts jobs on a large scale," said Rainer Wend, an economic policy spokesman for the center-left Social Democrats, who make up half of Germany's governing coalition.
"Society will not be able to stand for that," he told ZDF television.


Updated : 2021-01-17 15:15 GMT+08:00