German unemployment continues to rise, jobless rate rises to 6.3 pct in May
Unemployment in German continues to rise, while employment is reducing significantly, summarizing the current unpleasant situation of the German labour market, noted Commerzbank in a research report. The corona pandemic and the economic shutdown in March/April continue to impact the German labor market. The Federal Employment Agency showed that the unemployment in May rose again by 238,000 to its current level of about 2.9 million. The seasonally adjusted jobless rate rose to 6.3 percent in May from 5.8 percent seen in April. The number of people employed dropped by 275k in April.
Moreover, the number of workers for whom firms want to apply for short-time work in May rose more massively than unemployment. The momentum has decelerated significantly. If they all actually ended up working short time, underemployment in Germany would be around 14 million, said Commerzbank.
However, things are not expected to get quite that bad. The Federal Employment Agency indicates today that by no means all employees for whom firms have announced short-time work would actually work short time in the end.
“According to past experience from the financial market crisis, this could be between a good half and three-quarters, i.e. around 7 to 8 million short-time workers (roughly 16 percent of labor force). However, this would mean that the current problems on the German labour market would still be enormous, as would be the consequences for public budgets (falling receipts, rising expenditure)”, added Commerzbank.