Neu Leonstein
02-11-2006, 22:36
It's finally getting better, guys!
http://www.iht.com/articles/ap/2006/11/02/business/EU_FIN_ECO_Germany_Unemployment.php
BERLIN: Germany's unemployment rate dropped below 10 percent last month for the first time in four years, government figures showed Thursday, underlining the recovery of Europe's biggest economy after years of stagnation.
The unadjusted jobless rate fell to 9.8 percent in October from 10.1 percent the previous month. The number of Germans registered as unemployed sank by 153,000 to 4.085 million.
While Federal Labor Agency chief Frank-Juergen Weise attributed the improvement to a traditional autumn upswing, he also said the drop in the number of jobless Germans was more than double the average for October over the past three years.
The jobless rate was last below 10 percent in November 2002, when it weighed in at 9.7 percent.
"The current positive trend in the labor market looks stable," Weise said.
Helped by a sustained boom in exports and signs of a long-awaited increase in consumer spending, Germany is emerging from years of sluggish growth. Over recent months, the upswing has finally begun to make itself felt in the labor market.
In seasonally adjusted terms, the jobless rate fell to 10.4 percent in October from 10.6 percent in September, and the number of people out of work dropped by 67,000.
That compared with a drop of 23,000 in September and far exceeded economists' forecast of a decline by about 20,000.
Although a drop in unadjusted unemployment was to be expected, "the extent of the drop underpins our view that the German labor market keeps rolling on," said Andreas Rees, chief economist for Germany for UniCredit Markets & Investment. He said hiring by private-sector companies accounted for the bulk of the improvement.
"Compared to the previous year, the recovery looks even more impressive with unemployment down nearly 470,000," Rees wrote in a research note. In October 2005, the jobless rate was 11 percent.
The German figures echo an unexpectedly strong performance in neighboring France, another key euro-zone economy, said Stephane Deo, an economist with UBS Investment Research in London.
Earlier this week, President Jacques Chirac said the unemployment rate in France dropped to 8.8 percent in September from 9 percent in August.
"The good performance of German corporates is now starting to influence households via the labor market," Deo argued. "We believe this is an element of great importance for the future performance of the German economy."
The unadjusted jobless rate peaked at 12.6 percent in February 2005, when the number of unemployed Germans reached a post-World War II record of 5.216 million.
That was a key factor in the election defeat last year of former Chancellor Gerhard Schroeder's center-left government.
"Even moaners and carpers can no longer ignore it: The breakthrough on the labor market has arrived," Vice Chancellor Franz Muentefering, who is also the labor minister, said of Thursday's figures.
"We have reason to be happy."
Furthermore, tax receipts by the government have actually exploded, helping with the deficit a little bit.
The problem is that the deficit is still gigantic (bigger than the US' actually as a percentage of GDP), and because Merkel has said she'll get it under control, there is a 3% increase in sales tax scheduled for next year. All sorts of people are worried that it will seriously hurt the upswing in domestic consumer confidence, and threaten the recovery.
What do you think? Should the government go back on the tax increase and wait for the deficit to close at a slower rate, or should it sacrifice a bit of economic growth to curb the deficit?
http://www.iht.com/articles/ap/2006/11/02/business/EU_FIN_ECO_Germany_Unemployment.php
BERLIN: Germany's unemployment rate dropped below 10 percent last month for the first time in four years, government figures showed Thursday, underlining the recovery of Europe's biggest economy after years of stagnation.
The unadjusted jobless rate fell to 9.8 percent in October from 10.1 percent the previous month. The number of Germans registered as unemployed sank by 153,000 to 4.085 million.
While Federal Labor Agency chief Frank-Juergen Weise attributed the improvement to a traditional autumn upswing, he also said the drop in the number of jobless Germans was more than double the average for October over the past three years.
The jobless rate was last below 10 percent in November 2002, when it weighed in at 9.7 percent.
"The current positive trend in the labor market looks stable," Weise said.
Helped by a sustained boom in exports and signs of a long-awaited increase in consumer spending, Germany is emerging from years of sluggish growth. Over recent months, the upswing has finally begun to make itself felt in the labor market.
In seasonally adjusted terms, the jobless rate fell to 10.4 percent in October from 10.6 percent in September, and the number of people out of work dropped by 67,000.
That compared with a drop of 23,000 in September and far exceeded economists' forecast of a decline by about 20,000.
Although a drop in unadjusted unemployment was to be expected, "the extent of the drop underpins our view that the German labor market keeps rolling on," said Andreas Rees, chief economist for Germany for UniCredit Markets & Investment. He said hiring by private-sector companies accounted for the bulk of the improvement.
"Compared to the previous year, the recovery looks even more impressive with unemployment down nearly 470,000," Rees wrote in a research note. In October 2005, the jobless rate was 11 percent.
The German figures echo an unexpectedly strong performance in neighboring France, another key euro-zone economy, said Stephane Deo, an economist with UBS Investment Research in London.
Earlier this week, President Jacques Chirac said the unemployment rate in France dropped to 8.8 percent in September from 9 percent in August.
"The good performance of German corporates is now starting to influence households via the labor market," Deo argued. "We believe this is an element of great importance for the future performance of the German economy."
The unadjusted jobless rate peaked at 12.6 percent in February 2005, when the number of unemployed Germans reached a post-World War II record of 5.216 million.
That was a key factor in the election defeat last year of former Chancellor Gerhard Schroeder's center-left government.
"Even moaners and carpers can no longer ignore it: The breakthrough on the labor market has arrived," Vice Chancellor Franz Muentefering, who is also the labor minister, said of Thursday's figures.
"We have reason to be happy."
Furthermore, tax receipts by the government have actually exploded, helping with the deficit a little bit.
The problem is that the deficit is still gigantic (bigger than the US' actually as a percentage of GDP), and because Merkel has said she'll get it under control, there is a 3% increase in sales tax scheduled for next year. All sorts of people are worried that it will seriously hurt the upswing in domestic consumer confidence, and threaten the recovery.
What do you think? Should the government go back on the tax increase and wait for the deficit to close at a slower rate, or should it sacrifice a bit of economic growth to curb the deficit?