German Unemployment Rises Less Than Expected

(RTTNews) - Germany's unemployment increased less than expected in May despite the economy entering a technical recession in the face of high inflation and tight monetary policy.

The number of unemployed persons increased 9,000 in May, the Federal Labor Agency reported Wednesday. This followed an increase of 23,000 in April and 18,000 in March. Economists had forecast unemployment to increase 15,000.

The unemployment rate held steady at 5.6 percent in May, in line with expectations.

Despite the weak economy, the labor market is stable overall, the Federal Employment Agency Director Daniel Terzenbach said. Employment growth continues, but it is losing momentum.

Although unemployment and underemployment decreased, these were less than usual for May, Terzenbach noted.

The agency said even without taking Ukrainian refugees into account, unemployment would have risen from the previous year, albeit less sharply.

The labor force survey for April, released by Destatis today showed that the unemployment rate remained unchanged at adjusted 2.9 percent. The number of unemployed decreased 6,000 or 0.4 percent on month to 1.30 million.

On an unadjusted basis, the jobless rate came in at 3.2 percent, the same rate as reported in April 2022. At the same time, the number of people in employment increased only 15,000 on March. Employment totaled 45.7 million in April.

The German economy entered a technical recession in the first quarter as high inflation weighed on household consumption. Gross domestic product decreased 0.3 percent after shrinking 0.5 percent in the fourth quarter.

The International Monetary Fund forecast Germany GDP to fall 0.1 percent this year and to expand only 1.1 percent in 2024.