Unemployment in Germany rose by 11,000 last month, more than economists had expected, bringing the number of jobless in Europe's largest economy to 4.36 million, the German federal labour agency said yesterday.
Most analysts, however, said the seasonally adjusted increase was still consistent with an expected stabilisation of the labour market this summer, as the economic recovery gathers pace and breadth.
Such optimism is based on a batch of recent business sentiment surveys, which suggest companies, bolstered by buoyant exports, are gradually moving to hire new staff.
"The correlation between the employment component of these surveys and actual hiring is so close that I use them as a proxy for employment," said Ms Elga Bartsch, economist at Morgan Stanley.
"Things are clearly pointing towards a stabilisation of the labour market."
Since the beginning of the recovery, the German economy has been walking on one leg: robust exports. Economists - and an unpopular government eager for good news - have been looking for evidence that these are translating into job creation, income growth and, ultimately, higher domestic demand.
"All indicators suggest Germany is experiencing an economic recovery," Mr Frank-Jurgen Weise, head of the labour agency, said yesterday. "But it has yet to have an impact on the labour market." Economists took heart from the employment statistics, whose release lags behind the unemployment figures by two months. Seasonally adjusted employment dropped by 10,000 in May. This compared with a revised drop of 14,000 in April and 13,000 a month on average in the first quarter.
"Both unemployment and employment figures clearly show a slower deterioration over the last three months," Mr Dirk Schumacher of investment bank Goldman Sachs wrote in a note.
"Overall, we still expect a stabilisation of the labour market by the end of the summer."
The rise in seasonally adjusted unemployment, which brought the unemployment rate to 10.6 per cent, was stronger than in May and June, with increases of 9,000 and 2,000 respectively. But it marked a deceleration from the 34,000 new jobless a month registered in the first quarter. - (Financial Times Service)
