(Bloomberg) -- Sign up for our new Stephanomics podcast
German unemployment fell to a fresh record low, suggesting that the country’s buoyant services sector is offsetting weakness in manufacturing.
The jobless rate slid to 4.9 percent in March, with the number of people out of work down 7,000 from the previous month. The labor market continues to develop favorably despite “receding economic tailwinds,” labor agency head Detlef Scheele said in a statement.
Europe’s largest jobs market has seen six years of almost uninterrupted improvement, and has been a major driver of consumption and wage growth. Yet survey-based indicators signal that an industrial slump is beginning to take its toll.
Germany’s Ifo Institute and London-based IHS Markit both signaled that manufacturers see their workforce declining. A European Commission survey showed employment expectations in the sector at the weakest since 2016.
Volkswagen AG, Ford Motor Co. and Kuka AG are among the companies that have announced job cuts to lower costs as uncertainties around global trade weigh on demand.
The Bundesbank has given up on a growth rebound in the first quarter, after the car industry nearly sank the economy into recession. At the same time, the institution expressed confidence that a deeper slump can be avoided, pointing to strong construction and private consumption, as well as expansive fiscal measures.
Jobless data for the euro area are due on Monday.
©2019 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR