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Carsten Brzeski, chief economist at ING, points out that the German unemployment dropped by 32,900 in February (not seasonally adjusted), bringing the total number of unemployed down to 2.373 million, the lowest February reading since reunification.

Key Quotes

“In seasonally-adjusted terms, unemployment dropped by 2,000, leaving the seasonally-adjusted unemployment rate unchanged at 5.0%. The number of vacancies increased for the first time since September last year and stood at 784,000, from 757,700 in January.”

“The strong labour market is a perfect illustration of the current divide between the domestic and external side of the German economy. While external uncertainties and a series of one-off factors brought the German economy close to a technical recession at the end of 2018, the labour market is still extremely strong, with unemployment numbers at record lows and the number of vacancies and employment at record highs. Inflation is also low and nominal wages are higher.”

“All in all, the German labour market remains an impressive growth engine for the entire economy, currently defying all external downside risks and uncertainties. It is a perfect illustration of the current divide of the German economy between a strong domestic and stuttering external part.”