German Unemployment Set For Another Surge
The German Federal Labour Office in Nuremberg.

- Unemployment change at 200k (prev 373k)

- Jobless rate forecast at 6.2pct (prev 5.8pct)

- Data due at 07.55 GMT Wednesday

 

Eric Culp, European Editor

LiveSquawk News

@EricCulpLS

 

Frankfurt, 1 June 2020 (LS NEWS) – An expected rise in German unemployment could push the total number of additional claims for the April-May period to over half a million in a country where more than 10mln people were already eligible for support from the government’s short-time work scheme.

 

The seasonally adjusted number of unemployed in May is expected to jump by 200,000 after April’s record increase of 373,000, which was nearly five times the market estimate of 76,000 and almost 400 times March’s rise of 1,000.

 

The seasonally adjusted unemployment rate in May is forecast at 6.2pct versus April’s 5.8pct mark.

 

Germany’s Federal Labour Office said more than 750,000 companies had applied for the country’s Kurzarbeit programme in April, which makes coverage available for up to 10.1mln workers. To put this in perspective, the office said only 3.3mln people were registered for the programme during the global financial crisis in 2009.

 

EU-wide jobless data for April is due later Wednesday morning (09.00 GMT).

 

Government programmes soften unemployment growth

 

As Germany and much of the Continent continue to lift pandemic restrictions on commerce and the citizenry, economists note that short-term work schemes in major European economies are helping them better weather the impact of the virus than other nations.

 

“In Germany we expect a more modest effect from the economic activity slowdown on unemployment,” Nomura said. “A number of European countries have put in place schemes to guarantee large portions of the pay of furloughed employees for a time-limited period (in Germany, France, Italy and Spain: Kurzarbeit, Chômage Partiel, Cassa Integrazione, ERTE, respectively).

 

“We think this will prevent, to a certain extent, an even larger rise in euro area unemployment.”

 

But one unemployment indictor in Europe’s largest economy signals continued job losses. Last week, the monthly employment barometer for May from labour office unit IAB edged minimally higher from its all-time low in April. IAB said this points to a “significant deterioration of the job market in the coming months.”