The labour market in October 2020

The corona crisis has clearly left its mark but improvements can be seen

29 Oct 2020 | Press Release No. 46

“There was a sharp drop in unemployment and underemployment in October, and short-time working arrangements continue to decrease. However, the first wave of the corona pandemic has clearly left its mark on the labour market”, said the Chairman of the Federal Employment Agency (BA), Detlef Scheele, at today’s monthly press conference in Nuremberg.

Unemployed persons in October: -87,000 – now 2,760,000

Unemployed persons compared to last year: +556,000

Unemployment rate compared to last month: -0.2 percentage points – now 6.0%

Unemployment and underemployment

The unemployment rate amongst the overall population has fallen heavily over the course of the autumn recovery in October. The number of unemployed persons amongst the overall population currently stands at 2,760,000, constituting a drop of 87,000 compared to last month and a decline of 35,000 if the figures are adjusted to account for seasonal factors. The number of unemployed persons amongst the overall population has increased by 556,000 compared to last year. The unemployment rate amongst the overall population fell by 0.2 percentage points to 6.0% from September to October, constituting a rise of 1.2 percentage points compared to the figures recorded in October last year. The unemployment rate amongst the labour force stood at 4.4% in September, as calculated by the Federal Statistical Office according to the ILO employment concept.

If seasonal factors are taken into account, there has been a decrease of 40,000 compared to 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 3,552,000 persons were underemployed in October 2020 – 420,000 more than a year ago.

Short-time work

Before receiving short-time working allowance for their employees, companies have to report the expected reduction in their working hours. According to the data obtained so far, short-time working arrangements were reported for 96,000 million people from 1 to 25 October due to the economic situation. In other words, short-time working arrangements are being reported for roughly the same number of people as last month.

Data on the actual amount of short-time work is available until August. According to the provisional extrapolated figures of the BA, short-time working allowance was paid out to 2.58 million employees in August. This indicates a gradual drop in the amount of short-time working allowance claimed since the high of almost 6 million in April.

Gainful employment and employment subject to national insurance payments

The economic restrictions imposed to tackle the corona crisis have led to significant drops in gainful employment and employment subject to national insurance payments, but the figures are currently stabilising at a lower level. According to the Federal Statistical Office, the number of persons in gainful employment (in line with the domestic concept) in September rose by 24,000 compared to the previous month if the figures are adjusted to account for seasonal factors. There are now 44.86 million persons in gainful employment – 649,000 fewer than last year. If the figures are adjusted to account for seasonal factors, employment subject to national insurance payments rose by 29,000 from July to August. According to the extrapolated figures of the BA, there has been a drop in employment subject to national insurance payments compared to last year: 33.51 million workers have been recorded – 104,000 fewer than in August 2019.

Labour demand

After the demand for new workers plummeted at the start of the corona crisis, it is now recovering at a noticeable level. 602,000 jobs were registered with the BA in October – 162,000 fewer than last year. If these figures are adjusted to account for seasonal factors, the amount of jobs registered with the BA has increased by 17,000. The BA job index (BA‑X) – an indicator of the labour demand in Germany – rose by 4 points to 98 points in October 2020, putting it 23 points below the level recorded last year.

Cash benefits

1,065,000 persons received unemployment benefits in October 2020 – 359,000 more than a year ago. In October, there were 3,827,000 persons who were fit to work and eligible to receive basic security benefits for job seekers (German Social Security Code II). This represents an increase of 39,000 persons compared to October 2019; 7.0% of people of working age living in Germany were in need of help.