German Joblessness Fell in November Despite Second Lockdown
(Bloomberg) -- Germany’s labor market shrugged off a worsening pandemic and new restrictions, with unemployment unexpectedly declining for a fifth month in November.
A drop of 39,000 left the total number of jobless people at 2.82 million, pushing the unemployment rate down to 6.1%, according to the Federal Labor Agency. Economists surveyed by Bloomberg had expected an increase of 8,000.
While companies are avoiding widespread dismissals in response to the country’s second lockdown, the agency’s head Detlef Scheele said they have grown reluctant to hire.
Large parts of the jobs market continue to be propped up by government subsidies. An increasing share of companies is relying on furlough programs to pay their workers, according to the Ifo Institute, which estimates that 28% of businesses made use of the state aid in November, up from 24.8% in October.
The country has been in a partial lockdown since the beginning of last month, with restaurants, bars, gyms and cultural venues shut to try to limit the spread of the coronavirus. Germany’s latest restrictions are due to expire right before the Christmas holidays.
That means any resulting labor market strains could still materialize in the coming months. Three in four hotels consider the crisis an existential threat, and business confidence across all sectors of the economy dropped for a second month in November.
European Central Bank officials will discuss the state of the region’s economy at a meeting next week, and are widely expected to boost and extend monetary stimulus. Eurostat will provide updates on euro-area unemployment on Wednesday.
©2020 Bloomberg L.P.