Unemployment at record low in january despite ice and snow

Unemployment at record low in january despite ice and snow

Despite a sharp rise in unemployment, the german labor market started the new year as well as it has since 26 years ago. Fewer unemployed in a january there had been in 1991.

According to the federal employment agency (BA) on tuesday, 2.777 million men and women were unemployed at the beginning of the year. That was 209,000 more than in december, but 143,000 fewer than the year before. Unemployment rate up 0.5 points on previous month to 6.3 percent.

However, if we also include those jobseekers who are currently attending training courses and continuing education programs or who have been on sick leave as a result of job center and employment agency placements, there were 3.73 million unemployed people in germany in january – around one million more than last year. Underemployment – the technical term for it – was 49,000 higher in january than a year ago, the federal agency said.

BA head frank-jurgen weise nevertheless expressed satisfaction: "things are going well on the labor market in 2017."This assessment was shared by federal labor minister andrea nahles: "the german labor market has followed the good economic forecasts and continues to be receptive," the SPD politician commented on the latest labor market figures. "Overall, the picture is clear and the trend is unambiguous: unemployment is falling, employment is rising."

The sharp rise in unemployment in january should not be overestimated, says weise. There were only seasonal reasons for it. Work stops at many construction sites due to frost and snow. In addition, many of the salesmen and women hired for the christmas business lost their jobs at the beginning of the year. And: some companies are waiting until spring to hire new employees, says weise, who is retiring at the end of march.

In february, on the other hand, we can expect another sharp rise in the number of unemployed. Because of the early payment date in january, the frosty period, especially in southern germany, will probably not be reflected in the february figures until then.

The unusually high decline in the seasonally adjusted number also shows how good the current development is: without the strong seasonal effects in january, the number of job seekers would have fallen by 26,000.

Weise no longer excludes the possibility that the brexit and the impending isolationist policy of the new US president donald trump will have an impact on the german labor market. "Effects we will certainly have in that year. How rough they will be, it will be seen only in the middle of the year."At the moment there are no traces of this on the labor market. For the time being, it therefore continues to adhere to the BA’s forecast of 2.6 million unemployed on average in 2017, which is around 70,000 fewer than in 2016.

Meanwhile, the number of unemployed refugees continued to rise as expected. At 178,000, the figure in january was around 13,000 higher than in the previous month. On the other hand, 441,000 refugees were registered as "jobseekers" with the job centers. Many asylum seekers were still undergoing integration and vocational preparation courses and could therefore not yet be placed in employment. 605,000 refugees are currently receiving hartz IV benefits, including children and the elderly. Weise estimates that their number could rise to more than 700,000 this year.

Meanwhile, the jobs boom of recent years seems to be losing some of its momentum. New jobs continue to be created, but "growth has slowed considerably of late," weise conceded. The number of employed persons in december 2016 was 43.59 million, according to the federal statistical office – only 233,000 more than in the same month of the previous year. According to BA projections, the number of jobs subject to social security contributions was 31.72 million in november, which was also only 332,000 more than in the same month of the previous year. At that time, the increase had been significantly higher.

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