German labor market remains robust amid economic uncertainties

The number of unemployed people in Germany declined slightly to 2.44 million in October, as the unemployment rate fell to 5.3 per cent, the country’s Federal Employment Agency (BA) said.

“Overall, the labor market remains robust, with employment in particular continuing to grow,” said Andrea Nahles, Chairwoman of BA’s executive board on Wednesday.

In September, the number of people in employment reached a new all-time high, according to preliminary calculations published by the Federal Statistical Office (Destatis) on Wednesday.

“However, the consequences of the economic uncertainties are visible,” warned Nahles.

“More companies are again preparing for possible short-time work and reducing their demand for new staff.”

Germany’s short-time work program, a form of state aid to avoid layoffs during crises, was heavily used during the Covid-19 pandemic. Official figures are only available up until August, but these show that 106,000 employees were still registered with the program at that time, Xinhua news agency reported.

Next year, Europe’s largest economy is expected to slide into recession. In line with leading economic institutes, the German government is now also predicting an economic contraction of 0.4 per cent in 2023.

To cushion the effect of the energy crisis on consumers and companies, the German government has agreed on three relief packages, totaling 95 billion euros ($94 billion). In addition, a “protective umbrella” of up to 200 billion euros has just been approved, to cap electricity and gas prices. (1 euro 0.99 US dollars)

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