The economic downturn is driving the number of unemployed up again in August – according to official figures, 2.696 million people were unemployed. The labor market is still in a “solid basic condition”, the federal agency explained.
The number of unemployed in Germany continued to rise in August. The Federal Employment Agency recorded 2.696 million unemployed. That is about 79,000 more than in July and 148,000 more than a year ago. The unemployment rate rose by 0.1 points to 5.8 percent.
“The summer break and the weak economy are leaving their mark on the labor market,” said the head of the Federal Employment Agency (BA), Andrea Nahles. Nevertheless, the labor market is still in a “solid basic condition”, she explained.
Decrease in vacancies
In August, 771,000 job vacancies were registered with the BA, 116,000 fewer than a year ago. According to the Federal Agency, the training market was still in motion in August. By the balance sheet date on September 30, the number of vacant training positions and applicants without a position would fall significantly.
It is not unusual for unemployment to rise in the summer months, as companies hire fewer people during the holiday season and, for example, new training contracts usually only begin in the autumn. However, a look at the seasonally adjusted figures shows that the number of unemployed increased by 18,000 compared to the previous month, even after eliminating seasonal effects.
According to the Federal Agency, unemployment would have increased even without Ukrainian refugees. The BA reported that the increase in the previous months caused by the weak economy continued.
Federal Agency: “Demand for forces in a downward trend”
In fact, the slump is making companies more cautious about hiring new employees. The Federal Employment Agency’s job index, an indicator of labor demand, fell to its lowest level in more than two years in August. The Federal Agency announced that it fell by two points compared to the previous month to 117 points. The barometer even lost 17 points within a year.
“This means that the reported need for labor this month is still on the downward trend,” it said. In most sectors of the economy, the demand for labor fell compared to the same month last year – “mostly in a double-digit percentage,” as the Federal Agency emphasized.
Experts don’t expect any wave of layoffs
According to the employer-related Institute of the German Economy (IW Köln), the economic downturn is also having an impact on the labor market. “Companies are more reluctant to hire new staff,” according to the IW researchers in their new forecast. Although no major redundancies are to be feared, the unemployed are having increasing difficulties finding new employment.