German Unemployment Increases Unexpectedly

In a report, Germany’s Federal Statistics Office said the number of unemployed people increased by a seasonally adjusted 9,000 this month, disappointing expectations for a drop of 5,000.

The labour market’s weakness this month could be a first sign that regional spillovers are affecting Europe’s economic powerhouse. Even so, business confidence rebounded in July after a euro-area deal granted Greece talks toward a third bailout, preventing for now a default or potential exit from the currency union.

The German economy has been expanding steadily, if unspectacularly, since the middle of 2014 and the government expects it to grow by 1.8 percent this year.

Data from Destatis today showed that the number of unemployed people increased to 1.98 million in June from 1.97 million in May.

German economic growth weakened to 0.3 percent at the start of this year and the finance ministry said last week that the economy would probably expand by around the same amount between April and June, with domestic demand propelling growth while foreign trade picks up. “In the summer months they finish their occupational or academic training and then look for a position”. BA had previously reported a reduction of 1,000 in June.

Despite July’s small setback, Germany’s labor market remained one of the most vibrant in the eurozone.

It was the fifth month in a row that the seasonally adjusted rate – which measures the jobless total against the working population as a whole – stayed at 6.4 percent, the lowest level since 1991.