Unemployment increases by 40,000 in June – Economy

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In total, around 2.85 million people are registered as unemployed in Germany. The number of newly registered short-time workers fell sharply.

The number of unemployed continues to rise due to the corona pandemic. In June 40,000 more people were out of work than in the previous month – a total of 2.85 million. However, the increase brakes significantly. Almost half a million citizens lost their jobs in May and April.

“The labor market is still under pressure due to the corona pandemic,” said Detlef Scheele, head of the Federal Employment Agency. “But the massive use of short-time work is stabilizing.” Companies registered additional short-time work for 340,000 employees. This increase also flattens out: From March to May, the companies registered 11.8 million employees. How many of them actually work on a short-term basis will only become clear after a delay. In April it was almost seven million. That is far more than the last major economic downturn, the 2008/2009 financial crisis.

The corona crisis has left its mark on the labor market. Usually, employment increases at the beginning of summer. Compared to the previous year, there are now 640,000 more unemployed.

The situation on the labor market largely depends on how quickly Germany can get out of the crisis. Most research institutes expect economic output to shrink by six to seven percent this year. However, they assume that the economy has been slowly recovering since the beginning of the easing, which improves the chances of new jobs. The Institute for Labor Market and Vocational Research (IAB), the research institute of the Federal Employment Agency, expects 2.8 million unemployed per year after a short-term increase of over three million on average. That would be half a million more than last year, but relatively little compared to Spain, Italy or the USA, where the situation is worse.

In their relatively optimistic prognoses, the German researchers assume that there will be no second wave of infections with new severe restrictions on companies. They also assume a slow recovery in the global economy. Neither is certain.

Regardless of the question of a second lockdown, there are also more skeptical forecasts. For example, the former economy Bert Rürup assumes that the number of unemployed will increase to 3.5 million by the end of the year and will remain there over the next year. Then the corona pandemic would have left drastic marks on the job market.

Other researchers emphasize the effect of the extensive government aid packages. The Nuremberg IAB Institute expects that the economic stimulus package with the lower VAT will increase economic growth in 2020 and 2021 by three percent – and the number of employees by 440,000.

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https://www.sueddeutsche.de/wirtschaft/corona-krise-arbeitslosigkeit-juni-entwicklung-1.4953343

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