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Carsten Brzeski, chief economist at ING, notes that the German unemployment increased by 43,900 in August (not seasonally adjusted), bringing the total number of unemployed up to 2.319 million – the highest level since February 2019.

Key Quotes

“In seasonally-adjusted terms, unemployment increased by 4,000, keeping the seasonally-adjusted unemployment rate stable at 5.0%. Still, in unadjusted terms, this is the worst August performance of the German labour market since reunification.”

“The negative impact of the industrial meltdown of the last twelve months has started to spread to other parts of the German economy.”

“Looking at the regional statistics, it is mainly the automotive sector, in which short-work schemes have increased.”

“All of this only means that the protection shield against the industrial slowdown and external woes is getting thinner if not wearing out. This is a stagnation and not a crisis.”

“Total unemployment is still historically low but the trend is clearly not a friend for the German economy these days.”