German unemployment rate rises in May
By Michele Maatouk
Date: Wednesday 03 Jun 2020
(Sharecast News) - The German unemployment rate rose in May as the coronavirus pandemic and efforts to slow its spread continued to take their toll, according to figures released by Destatis on Wednesday.
The unemployment rate increased to 6.3% from 5.8% in April, coming in a touch above expectations of 6.2%
Jobless claims rose by 238,000 in May, but this was down from a revised 372,000 jump the month before. Economists had been expecting a 200,000 rise.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said the unemployment report offers clear evidence that joblessness is in fact now rising even as the government's Kurzarbeit scheme is being used liberally by firms.
"The jump in claims over the last two months, coupled with the 0.5pp increase in unemployment in May, easily represent the most violent shifts in these data ever recorded," he said.
"That said, they would have been a lot worse had it not been for the government's job-retention scheme. On the labour demand side, vacancies are in free fall, indicating that those unfortunate enough to be laid off will struggle to find a new job, at least in the very near term as firms remain reluctant to take on new commitments."
The Kurzarbeit scheme is a short-term allowance that compensates lost earnings for workers who have temporarily been put on reduced working hours due to reasons or circumstances beyond the employer's control.
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