German Unemployment Figures Down

Unemployment in the German economy fell by a much shorter number than had been expected, which may be a sign of problems in the labour market, according to official figures released today.

The figures released today by Germany’s Labour Office show that unemployment fell by just 15,000 to 3.75 million, despite analysts predictions of a much larger fall representing the ongoing recovery of the German economy.

Analysts had predicted that, based on a number of other factors, employment would have increased by around 30,000 - hence double the actual outcome of the last month’s swing.

It is thought the ongoing sub-prime lending crisis in the US, combined with a decline in domestic investor confidence are responsible for the lower falls, which are seen as an indicator of poor business growth and development in the current world economic climate.

With credit coming at an increased premium through ongoing liquidity problems with US lenders, business funding is becoming less available for expansion projects, which could be responsible for the smaller than predicted drop in unemployment numbers.

Whilst analysts may have predicted a larger rise, the German authorities are quick to point out that the number of unemployed workers has fallen, and the economy is making good progress on the road to recovery, after several years of sluggish economic growth and record levels of unemployment.

Alexander Koch of Unicredit remained optimistic for the future of the labour market, citing continued steady growth in business as a driving force to lower unemployment over the coming months.

“Assuming no dramatic slowdown of the global growth dynamic due to the current financial market turbulence, the jobless rate is expected to remain steady without any major upward swings.”

Trading on the DAX exchange in Frankfurt was not deterred by the news, and continued to grow despite the negative impact of trading in the US, and this potentially damaging figure.

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