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German employment report: What to expect

H.S. Borji
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Unemployment in Germany continued to edge lower in March, according to a consensus of market analysts closely monitoring the Eurozone.

Germany’s unemployment count declined by a seasonally adjusted 14,000 to 2.914 million in February, after falling 28,000 at the start of the year, official data showed. February marked the third consecutive month unemployment levels declined, a sign German employers were growing more confident in recovery.

Economists say unemployment levels declined by 10,000 in March; the unemployment rate was unchanged at 6.8 percent.

The Institute for Employment Research announced earlier this month German job vacancies surpassed the 1 million mark in the final quarter of 2013. Compared to the previous 12 month period, job vacancies increased by 20,000.

Rising job vacancies point to deepening recovery in Germany, but also exacerbate existing skills shortages for Europe’s largest economy. As the German economy continues to accelerate, employers are desperately seeking highly-skilled professionals in engineering, information technology and healthcare. To-date, higher immigrant intake has been a necessary but insufficient strategy for mitigating the skills gap, which is the result of an ageing German population and declining birth rates.

Germany has been a source of strength for the struggling Eurozone, which continues to face a myriad of obstacles including near-record high unemployment and weakening inflation. In terms of inflation, those fears were elevated today after the European Commission said Eurozone inflation fell to its lowest level since November 2009. Annual consumer inflation in the 18 nations comprising the euro area was 0.5 percent in March, cooling from February’s 0.7 percent pace.

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