German Unemployment Holds Stable at 6.8%
The German unemployment rate for February has just been announced at a stable 6.8%. This meets the consensus estimate of 6.8% and remains consistent with the January figure of also 6.8%. This month 14 thousand extra people have come off the unemployment register.
Although today’s figure is not quite full employment it has to be remembered that Germany is a large and diverse country. Structurally, there are many areas experiencing shortages of labour at the moment, these are serviced somewhat by Germany’s unofficial grey economy, which can run at up to 5% on occasion. These workers will not show up in the employment statistics, but when accounted for would take Germany much closer to a full employment situation.
Open borders in Europe mean that Germany’s strong employment position can alleviate the unemployment pressures of some of it’s near neighbours. There is obviously not a direct correlation between unemployment in Germany and unemployment in the eurozone as a whole, but the migrant worker situation does, to a certain extent, tie the labour market of bloc’s largest economy to that of the other member states.
The Euro dived this morning following the publication of lacklustre French consumer confidence numbers, it paused briefly before recommencing its downward move on the back of weaker than expected GDP figures out of Spain. Bottoming out at 1.3650, the single currency has fallen a full figure against the US Dollar in the space of 24 hours.
This morning’s stable German unemployment numbers are providing some solace for Euro bulls, the single currency has found some buyers but the market feels very nervous. There is a raft of Euro data being published throughout the day, which is only going to add to the volatility already in the currency markets. There will be plenty of opportunity for intraday traders today but expect it to be a roller coaster.
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