German Jobless Numbers Worsen

May 7, 2003

German unemployment has risen for a 13th consecutive month, indicating further stagnation for Europe's largest economy.

Seasonally adjusted figures showed a rise in April of 44,000 to 4.46 million people, just above analyst forecasts.

The unadjusted figures showed a fall of 112,700 to 4.495 million, giving a rate of 10.8% unemployment.

This was down from an unadjusted 11.1% in March.

Unemployment usually falls in spring and summer as farms, construction, leisure and tourist companies hire seasonal workers.

"The unadjusted decline is much weaker than is normal for April, despite the good weather," said Peter Meister, economist at ING BHF Bank.

"The poor business climate had already suggested that so the figures are not surprising and no speedy improvement is to be expected," he added.

Weak outlook

"The labour market can't improve at the moment because of structural problems and the weak economy," the Labour Office said in a statement.

There is little prospect for unemployment falling significantly this year after the government last week cut its growth forecast for this year to 0.75% from 1%.

Chancellor Gerhard Schroeder is currently trying to introduce an economic stimulus package which would making it easier for employers to sack staff and reduce health care and pensions.

There is mounting opposition to his policies from trade unions, the ruling Social Democrats tradition supporters, and from within the party.

Schroeder's troubles

Mr Schroeder failed to resolve the division over his economic package at a meeting with the head of Germany's trade union umbrella federation on Tuesday.

"We exchanged our positions, each of us stuck to their own, I to mine and he to his," Mr Schroeder said.

He said the labour market would remain "difficult" and restructuring of the welfare state was necessary.

Mr Schroeder has made veiled threats to resign if his party does not support his economic package, known as Agenda 2010.

http://news.bbc.co.uk/2/hi/business/3006463.stm