German Unemployment Falls as Economy Starts to Shrug Off Virus
(Bloomberg) -- German joblessness fell in May, adding to signs that the economy is starting to turn the page on the coronavirus pandemic as restrictions are loosened.
The drop of 15,000 put the total number of unemployed at 2.74 million, keeping the rate at 6%, according to the Federal Labor Agency. Economists surveyed by Bloomberg had expected a decline of 9,000.
Germany’s infection rate has fallen sharply over the last five weeks and its vaccination campaign has picked up speed, allowing shops, restaurants and cultural venues to gradually reopen. The manufacturing sector had already held up well during the most recent round of restrictions, though it’s now hobbled by supply-chain disruptions.
“The labor market has showed first signs of a broad improvement in May,” labor agency chief Detlef Scheele said in a statement. “The fallout of the coronavirus crisis remains clearly visible but is getting somewhat smaller.”
Companies are also making less use of the country’s furlough program, which helped millions of workers hang on to their jobs during the pandemic. The number of people in short-time work declined by 10% in April, according to the Ifo Institute.
Despite the widespread use of such job-retention programs, unemployment in the euro area is still higher than before the pandemic. It’s forecast to fall only slowly as the recovery gets under way. Eurostat is due to release unemployment figures for the currency bloc at 11 a.m. Luxembourg time.
The 27-nation European Union lost 3.5 million jobs last year that will take until 2023 to be recreated, according to a recent study by Accenture. That’s as much as one year after the last European Union country returns to pre-crisis output.
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