Fewer Germans are jobless while Spain's rate rises

IT WAS a tale of two labour markets in Europe yesterday. Germany continues to shrug off the euro zone recession with new data showing its jobless rate has hit a 20-year low.

Spain, on the other hand, has seen its jobless rate rise for the fifth consecutive month to a 15-year high – up nearly eight percentage points on a year ago.

Germany’s unemployment rate nudged up in December to 6.6 per cent from 6.4 per cent in November. However, the seasonally adjusted figure showed 22,000 fewer people out of work in December and a 2011 average of 2.967 million out of work, the lowest rate since 1991.

“Demand for labour was very high over the whole year,” said Frank-Jürgen Weise, head of the federal labour agency. “After crisis year 2009 and economic recovery in 2010, the positive economic development showed itself well in 2011, to the benefit of the labour market.”

Mr Weise said that half of the new jobs created in 2011 were part-time, contract jobs.

German labour minister Ursula von der Leyen said the pace of decline in Germany’s jobless rate would slow in 2012 with a cool-off forecast in Europe’s largest economy.

“The risks in the euro zone and the global economy remain serious,” said Ms von der Leyen. “But there are no signs that they will have an impact on the labour market in the short term.”

On Monday, the federal statistics office reported a record 41 million Germans in work. A survey for Die Welt newspaper yesterday showed 90 per cent of Germans confident their jobs were secure. However, 40 per cent expect the economy to slow down from 2011’s forecast 3 per cent growth.

Economist Andreas Rees of UniCredit said the German labour market still had “substantial” momentum despite the looming slowdown. “Companies are still sitting on a huge pile of backlog orders, thereby keeping the labour market going,” he said, even as new orders slow.

In Spain, meanwhile, the new government made no attempt to sugar-coat the bitter unemployment data yesterday.

The number of Spaniards without work rose by 1,897 to 4.42 million last month, the highest rate since the start of labour data collection in 1996. Compared to a year ago, the number of those without work was up by 322,286 people, or 7.86 percentage points.

The figures “confirm the deterioration of the economic situation during the second half of the year”, Spain’s labour ministry said.