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The labour market in July 2019

Rise in unemployment mainly caused by seasonal factors
31 Jul 2019 | Press Release No. 23

“There was a rise in unemployment and underemployment in July, which was mainly due to the start of the summer break. Companies are showing slightly less demand for new employees, while employment continues to rise overall – but less dynamically than before”, stated the Regional CEO of the Federal Employment Agency (BA), Daniel Terzenbach, at today’s monthly press conference in Nuremberg.

Unemployment rate in July:
+59,000 – now 2,275,000

Unemployment compared to last year:
-49,000

Unemployment compared to last month:
+0.1 percentage point – now 5.0%

Unemployment, underemployment and short-term unemployment

The unemployment rate rose from 59,000 to 2,275,000 at the start of the summer break between June and July. If these figures are adjusted to account for seasonal factors, a slight increase of 1,000 can be calculated for July compared to last month. As we face an economic downturn, this seasonal rise is more pronounced with regard to unemployment insurance. 49,000 fewer persons were registered as unemployed compared to last year. The unemployment rate has risen by 0.1 percentage point to 5.0%. In comparison to last year’s figures for July, however, unemployment has dropped by 0.1 percentage point. The short-term unemployment rate stood at 3.1% in June, as calculated by the Federal Statistical Office according to the ILO short-term employment concept.

If seasonal factors are taken into account, there has been no change from last month with regard to the underemployment rate, which also considers changes in labour market policy and short-term incapacity to work. A total of 3,201,000 persons were underemployed in July 2019 – 48,000 fewer than a year ago.

Short-term employment and employment subject to national insurance payments

There has been a further increase in short-term employment and employment subject to national insurance payments. According to the Federal Statistical Office, the number of persons in employment (in line with the domestic concept) in June rose by 8,000 compared to the previous month when the figures are adjusted to account for seasonal factors. There are now 45.30 million persons in employment – 410,000 more than last year. This increase is largely due to the rise in employment subject to national insurance payments – 557,000 more than last year. According to the extrapolated figures of the BA, a total of 33.41 million persons were in employment subject to national insurance payments in May. If these figures are adjusted to account for seasonal factors, this constitutes a rise of 20,000 persons from April to May.

Labour demand

There is a high demand for new employees, but this is becoming noticeably weaker. 799,000 jobs were registered with the BA in July – 24,000 fewer than last year. If these figures are adjusted to account for seasonal factors, the amount of jobs registered with the BA have dropped by 9,000. The BA job index (BA-X) – an indicator of the labour demand in Germany – fell by 4 points to 243 points in July 2019. This puts it 13 points below the level recorded last year.

Cash benefits

736,000 persons received unemployment benefits in July 2019 – 33,000 more than a year ago. In July, there were 3,930,000 persons who were fit to work and eligible to receive basic security benefits for job seekers (German Social Security Code II). This represents a decrease of 216,000 persons compared to July 2018; 7.2% of the people of working age living in Germany were in need of help.

Training market

From October 2018 to July 2019, 479,000 persons registered with their local Agentur für Arbeit or Jobcenter to apply for an apprenticeship – 23,000 fewer than in the same period last year. 178,000 of these were still looking in July. At the same time, 543,000 apprenticeships were registered – 11,000 more than last year. 207,000 of these apprenticeships were vacant in July. The most frequently registered apprenticeships were for prospective retailers, office workers and sales assistants. Experience shows that many applicants will find an apprenticeship or an alternative by September, and that the vacant apprenticeships will be filled. As in previous years, however, there are still disparities between regions, occupations and qualifications in 2018/2019 that will make it considerably more difficult to balance supply and demand.