The German jobless rate experienced a slight increase in November, adding to the signs of a slowdown in Europe’s largest economy. The rise in unemployment comes as a result of central bank interest rates and weak global demand. According to data from the Federal Employment Agency, the adjusted unemployment rate rose from 5.8% in October to 5.9% in November. This increase was not anticipated by economists surveyed by The Wall Street Journal, who expected the rate to remain unchanged at 5.8%.
Although the number of unemployed individuals did rise in November, the rate of increase was slower compared to the previous month. On a seasonally adjusted basis, there was an increase of 22,000 jobless claimants, a smaller figure than the 31,000 increase in October. Economists had predicted a 20,000 rise in jobless claimants, meaning the actual increase exceeded expectations.
On a yearly basis, the demand for labor has weakened, indicating a loosening jobs market. The Federal Employment Agency reported that the number of registered job vacancies stood at 733,000, representing a decrease of 90,000 compared to the same period in 2021.
Despite the smaller growth in unemployment, the economic outlook for Germany remains weak. It is worth noting that a loosening jobs market could potentially confirm that the European Central Bank has concluded its recent hiking cycle. However, it is yet to be seen how the full impact of higher borrowing costs will affect the overall economy. In the third quarter of this year, Germany’s GDP contracted by 0.1%.