The number of unemployed is increasing – but not because of Corona

In August, the Federal Employment Agency recorded another rise in unemployment. However, there is definitely good news in the details of the new statistics.

How is the German economy getting on with the corona crisis?

Dhe number of unemployed in Germany rose again in August – however, as in the previous month, at the usual seasonal rate. According to the Federal Employment Agency, 2.95 million people were unemployed, 45,000 more than in July and 636,000 more than a year ago. The unemployment rate rose within a month by 0.1 percentage points to 6.4 percent.

Unemployment usually rises in August because employment and apprenticeships end before the summer vacation. For comparison: In August 2019, the number of people without a job increased by 44,000 compared to the previous month.

As in July, there was no additional corona-related rise in unemployment, said the chief executive of the Federal Agency, Detlef Scheele, on Tuesday in Nuremberg. “Nevertheless, the effects of the pandemic on the labor market are still very clearly visible.”

Fewer people on short-time work

According to preliminary figures from the Federal Employment Agency, 5.36 million people in Germany were on short-time work in June. In May the number was 5.82 million. In April it had soared to 5.98 million. According to the labor market experts, the figures are extrapolated and adjusted monthly so that they can change retrospectively.

In the meantime, after the massive increase in March and April, the number of employees for whom companies register short-time work continues to decline. From August 1 to August 26, the Federal Agency recorded advertisements for short-time working for 170,000 people. Experience shows that the number of actual short-time workers is lower because companies sometimes report short-time work as a precautionary measure.

According to a survey by the Ifo Institute, short-time work is falling in Germany. According to this, in August there were short-time working in 37 percent of the companies taking part in the survey, in July it was 42 percent.

Various experts are currently seeing signs that the labor market has recovered – thanks in part to the short-time work that has limited the extent of the layoffs. However, they are concerned about the increasing number of infections and the fear of new restrictions. According to the Nuremberg consumer research company GfK, this has already dampened the buying mood of consumers.