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German unemployment rate steady in March

By Michele Maatouk

Date: Tuesday 31 Mar 2020

German unemployment rate steady in March

(Sharecast News) - The number of people out of work in Germany rose a little in March, according to figures released by Destatis on Tuesday.
Unemployment claims increased by 1,000 to 2.27 million on a seasonally-adjusted basis, following a downwardly-revised 8,000 decline in February and versus expectations for a 29,000 rise.

However, the headline unemployment rate was unchanged at 5.0%, below expectations for a small uptick to 5.1%.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "These data are a big positive surprise. Both we and the consensus had expected a clear shift to the downside, reflecting the terrible survey data and evidence that both services and manufacturing shed workers at the end of Q1.

"Two explanations are likely. Firstly, the labour market is a lagging indicator, after all, and it will take a while before the slowdown shows up. In addition, restrictions were imposed relatively late in Germany compared with the rest of Europe, indicating that the April data will provide a clearer picture of the extent of the weakness. Secondly, the German labour market is very different from the US - where claims are now soaring - mainly due to the tendency of firms to keep workers, but at a reduced schedule and pay, via the so-called Kurzarbeit system.

"The number of firms taking advantage of this scheme has rocketed recently, in part because the government has pledged to provide additional support through this crisis. Overall we are confident that the unemployment rate will increase in the next six months, but today's data are encouraging all the same."

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