Germany Unemployment Increased In August

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Germany Unemployment Increased In August

Germany's Unemployment Numbers Jumped by 18K

The latest unemployment data from Germany shows a lot more people lost their jobs in August than the market expectations. Since the start of this year, the job market in Germany has been very strong, but it appears that we have finally started to see some cracks.

The data from FLA (Federal Labour Office) reveals that around 18,000 people in Germany lost their jobs. This makes it around 2.63 million if we look at the seasonally adjusted numbers. According to a poll of economists, an increase of 10,000 was expected in the unemployment numbers.

Germany's Unemployment Rate Is 5.7%

However, it appears that things are a lot worse than what the economists were thinking about the German labor market. After the recent report, the jobless rate in Germany is now standing at 5.7% based on seasonally adjusted numbers.

According to Andrea Nahles, who heads the labor office, the economic weakness, as well as the summer break, are showing their full effects on the labor market. However, she also added that the condition is very basic and doesn't warrant any extreme caution.

For the month of August, around 771,000 (771K) openings for jobs were available in Germany. When compared with the last year's data, that's a reduction of almost 116,000. In addition, the labor demand has also gone down if we look at the data from the Federal Labor Office.

But despite the reduction in job openings, the overall number is still at a higher level if we take a broader look at the past trends.

Just a year ago, the interest rate in Germany was around 1.08%, which now stands at 2.46%. That's more than a 100% increase in the interest rate, which is also a major factor that's dragging down the labor market in Germany. After all, high-interest rates may slow down inflation, but we can't deny all the bad things it can do to a country's economy.

One of the sectors that get the most affected by high-interest rates is the jobs market. That's why the recent numbers for August aren't a big surprise, given the economic condition of the country.

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