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German unemployment rate unexpectedly surges to highest since 2021: Report

Germany’s unemployment rate unexpectedly rose to the highest level in 2 1/2 years, a sign that the weakness of Europe’s biggest economy is starting to impact its labor market.

It reached 5.9% in November, up from 5.8% the previous month, the Federal Labor Agency said in a statement on Thursday. Joblessness increased by 22,000, slightly exceeding the median economist estimate in a Bloomberg survey. 

“The economic slump is leaving its mark,” said Andrea Nahles, head of Germany’s Federal Labor Agency. “Employment is now only growing marginally and demand for workers continues to weaken.”

The labor market has been a resilient part of an economy that’s struggling to recover from its energy-induced crisis last winter. Output contracted in the third quarter and the Bundesbank reckons the country is in a recession. 

Half of German companies are struggling to fill vacancies due to an acute skilled labor shortage. This could create a loss of about 2% of gross domestic product, according to the industry lobby DIHK Chambers of Industry and Commerce.

Germany’s fiscal chaos, following a shock judgment by its top court, poses another risk to the recovery. European Central Bank President Christine Lagarde and Bundesbank chief Joachim Nagel have called on Berlin to create clarity on the budget soon.

©2023 Bloomberg L.P.

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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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Updated: 30 Nov 2023, 02:54 PM IST


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