German unemployment unexpectedly increased for the first time in six months amid signs of a slowdown in Europe’s largest economy.
The number of people out of work rose a seasonally adjusted 23,937 to 2.905 million in May, the Nuremberg-based Federal Labour Agency said today.
The adjusted jobless rate was unchanged at 6.7 per cent, the lowest level in more than two decades.
German business confidence decreased this month on concern growth will slow as the 18-nation euro area, the country’s biggest export market, struggles to sustain its recovery.
The Bundesbank has said the nation’s economic expansion this quarter is unlikely to match the pace of the first three months, which was boosted by unusually warm weather.
"The mild winter, which had flattered German economic data a bit in the first quarter with strong gross domestic product growth and job-market gains, is now striking back," said Christian Schulz, senior economist at Berenberg Bank in London. "Germany's labor market remains on a strong positive trend despite the slight May setback, however."
The German economy expanded 0.8 per cent in the first quarter, up from 0.4 percent in the previous three months, after the warmer weather boosted construction and domestic spending.
The number of unemployed in May rose by 16,018 in western Germany and 7,919 in the eastern part of the country, today’s report showed.
The total number of jobless declined by 24,798 the previous month. Germany's DAX index of stocks was little changed at 9,942 at 11:15 a.m. Frankfurt time, near a record high. The euro was little changed at $1.3621. "We have to acknowledge that the peak of economic momentum is behind us," said Andreas Scheuerle, an economist at Dekabank in Frankfurt.
“We’ve achieved a lot and it’ll be difficult to continue at the same speed. But at the moment, everything’s still fine economically speaking.”
Germany’s labour market is still at odds with those of its peers in Europe’s south and the currency bloc as a whole. More than one in four people in the Spanish workforce is without a job, and unemployment in the euro area was 11.8 per cent in March, just below an all-time high.
Bloomberg
