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Germany's unemployment rate this month rose for the first time in more than five years, the last sign of the difficulties facing Europe's largest economy.
The unemployment rate rose from 4.9% in April to 5% in May, the lowest rate since at least 1991, according to data from the country's central bank. This was the first monthly increase since November 2013.
The rise in the unemployment rate came as 60,000 more people were considered unemployed in May than in the previous month, the largest increase of this type in 10 years. Claus Vistesen, Chief Economist of the Macroeconomics at the Pantheon, notes that this increase is due in part to the reclbadification of some workers; However, he said that this still represented a slowdown in the country's labor market.
"The strong employment situation in Germany will not worsen spontaneously this year, but the improvement rate will deteriorate significantly, reflecting the exhausting slowdown in manufacturing," he said. -he declares.
Germany's unemployment rate remains close to the lowest level since the reunification of 1990 and much lower than that of the major eurozone countries such as France. Most economists view the German labor market as one of the most robust developed countries.
However, the German economy is showing signs of increasing tension in 2019. The trade dispute between the United States and China has profoundly affected the sentiment of German business leaders, who fear that the country's vast manufacturing sector will become a problem. collateral damage.
At the same time, there are indications that global growth may be slowing, which is another negative factor for a large open economy like Germany.
German manufacturers expect to reduce the number of jobs – a trend that has been maintained for three months, according to a survey published this week by the influential Ifo Institute in Munich.
"The willingness to hire new recruits has been steadily declining since the beginning of 2018," said Ifo. He added that most of the job growth occurred in the service sector, but that even in this country "the willingness to hire cools".
The feeling of anxiety has reverberated in the German bond market and investors are now seen as immune from German sovereign debt. The benchmark 10-year Bund fell to minus 0.16% on Wednesday after rising 0.2% in early March. The decline in bond yields reflects higher prices.
In Germany, the leading inventory barometer fell 3.8% this month, pointing to the worst performance since the global markets rally at the end of last year.
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