German joblessness up as euro crisis bites

BERLIN: German joblessness rose for a fifth month running in August,
the latest in a string of disappointing data that adds to evidence
Europe's largest economy is feeling the effects of the eurozone crisis.
Unemployment
still remains close to a post-reunification low, but the Federal Labour
Office acknowledged that slowing growth was beginning to take its toll
on what has been one of Europe's most resilient jobs markets.
Gross
domestic product (GDP) growth slowed to 0.3% in the second quarter as
companies, nervous about the debt crisis sweeping southern eurozone
states, cut back on investments.
Many economists are expecting
GDP to fall in the third quarter of the year, with Germany possibly
even falling into a technical recession defined as two consecutive
quarters of contraction in the latter half of 2012.
“The labour
market is losing its momentum. That is not surprising, given economic
developments over the winter as unemployment is a lagging indicator.
Currently, the worsening sovereign debt crisis is adding to that,” said
Commerzbank economist Eckart Tuchtfeld.
The Labour Office said
the seasonally-adjusted jobless total had risen by 9,000 in August,
broadly in line with expectations, pushing the number of people out of
work to 2.901 million, its highest level since November last year.
Data
released in August showed imports, exports and industrial orders all
shrinking, while business and investor sentiment surveys dropped and
the country's private sector shrank for a fourth straight month.
Big German companies like Metro, the world's No. 4 retailer, Lufthansa and Deutsche Bank are slashing thousands of jobs.
Labour
Office head Frank-Juergen Weise said slower economic growth was
beginning to show through, with labour market indicators developing
“increasingly weakly”. - Reuters