Labor market – less unemployed – economy

Contrary to the seasonal trend, the number of unemployed in Germany fell in August. Nationally, 2.58 million people were unemployed, 12,000 less than in July and 377,000 less than in August 2020, the Federal Employment Agency announced. The unemployment rate remained unchanged at 5.6%.

“The labor market has continued to recover,” said Detlef Scheele, chairman of the board of the federal agency. Unemployment continued to fall sharply, even though it was still the summer break. “Job growth is accelerating. Unemployment typically rises in August as companies hire fewer people and apprenticeships end before summer vacation. This summer, however, that will be overshadowed by catch-up effects: After the multi-month lockdown, there is a growing need for workers in many industries.

For the first time since 2010, the number of unemployed fell in August. Seasonally adjusted, the number of unemployed fell by 53,000. The reference date for labor market statistics was August 12. However, the consequences of the Corona crisis are still noticeable: according to an estimate by the Federal Agency, the level of unemployment is still 261,000 people higher.

The announcements of short-time working have also decreased. From August 1 to 25, companies registered partial unemployment for 68,000 people. Data on the number of people who actually received partial unemployment benefits are only available for June. For example, partial unemployment benefits were paid to 1.59 million workers – the number fell below two million for the first time since the start of the crisis. In April 2020, the partial unemployment benefit had reached a peak of nearly six million euros.

“Companies in Germany are hiring again,” said Fritzi Köhler-Geib, chief economist at KfW. Production has declined in recent months due to material shortages in manufacturing and construction. But the particular factors that led to the material bottlenecks would gradually dissolve over the next few months. In addition, the order situation in industry and construction is still very good: “These two elements indicate that the shortage of materials will have little impact on the recovery of the labor market. In order to avoid another economic setback, the top priority must be to further contain the pandemic, including by further increasing the vaccination rate.

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