German unemployment climbed for eighth consecutive month in November as Europe’s debt crisis curbed business investment and the economic growth.
The number of unemployed people increased by seasonally adjusted 5,000 to 2.94 million, said today the Federal Labour Agency in Nuremberg. Economists forecast an increase of 17,000. Adjusted unemployment rate stood at 6.9%.
With the Eurozone’s recession and the slowing growth of developing markets, German companies postpone investment decisions and hiring. The unemployment rate rose for the first time in the frames of three years in September. Although the largest economy in Europe has grown by 0.2% in the third quarter, recent reports indicate that growth may occur in stagnation in the fourth one.
The economist at HSBC Trinkhaus & Burkhardt AG in Dusseldorf Lothar Hessler claimed that the economic slowdown in the Eurozone is now also hitting Germany. This put an end of the previous upward momentum in the labor market with companies that are much more cautious about new investments.
Investments in appurtenance and equipment decreased by 2 % in the third quarter, compared to the second one. The economic expansion has been driven by exports, construction, household and public spending.
The unemployment rate in Germany is still near the bottom since two decades, fueling household costs and modifying the economic slowdown.
What happens to the German labor market is not a tragedy, said Andreas Shoyrle, an economist Dekabank in Frankfurt. He also added that companies may terminate the contracts of temporary workers and reduce production and investment, as demand has weakened, however, the rising business sentiment gives us hope.