The labour market in May 2021

First signs of improvement

01 Jun 2021 | Press Release No. 21

“In May, the first signs of widespread improvement in the labour market have emerged. The consequences of the corona crisis are still very evident, but they are becoming somewhat smaller,” said the Chairman of the Federal Employment Agency (BA), Detlef Scheele, today at the monthly press conference in Nuremberg.

Unemployed persons in May:

-84,000 – now 2,687,000

Unemployed persons compared to last year:

-126,000

Unemployment rate compared to last month:

-0.1 percentage points to 5.9 percent

Unemployment and underemployment

spring recovery, the number of unemployed in May 2021 is 84,000 lower than the previous month at 2,687,000. Seasonally adjusted, it fell by 15,000. The unemployment rate fell by 0.1 percentage points to 5.9 percent. Compared to May of the previous year, the number of unemployed has decreased by 126,000. The unemployment rate recorded a minus of 0.2 percentage points compared to the previous year. However, May 2020 was already massively affected by the corona crisis. The consequences amount to an increase of a good 450,000 unemployed or 1.0 percentage points in the unemployment rate. The unemployment rate calculated according to the ILO employment concept by the Federal Statistical Office was 4.6 percent in April.

Underemployment, which also takes into account changes in labour market policy and short-term incapacity to work, stood at 3,492,000 persons in May. That was 90,000 less 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 current data on verified reports, 96,000 persons were notified of cyclical short-time work from May 1 to 26. This means that the number of persons reported has continued to fall significantly.

Current data on actual take-up is available until March 2021. According to preliminary extrapolated data from the Federal Employment Agency, cyclical short-time allowance was paid to 2.61 million workers this month. This is the first time the March 2021 figure has fallen since November, when renewed containment measures began to have an impact.

Labour force participation and employment

In the aftermath of the corona crisis, labour force participation and employment had declined significantly, but are currently showing an upward trend. According to the Federal Statistical Office, the number of employed persons (according to the domestic concept) rose by 10,000 in April 2021 compared to the previous month, seasonally adjusted. At 44.50 million persons, it was 231,000 lower than in the previous year. Employment subject to social security contributions, whose data only extend to March 2021, increased by 38,000 in this month, seasonally adjusted. Compared to the previous year, employment subject to social security contributions fell in March by 16,000 to 33.63 million, according to BA extrapolations. Marginally paid employment is more affected by the measures to curb the Corona pandemic. According to preliminary, extrapolated data from the BA, there were 347,000 fewer marginally paid employees (in total) in March (6.90 million) than in the same month last year. Almost half of the decline was in the hospitality sector.

Labour demand

In May, 654,000 jobs were reported to the BA, 70,000 more than a year ago. If these figures are adjusted to account for seasonal factors, the amount of jobs reported to the BA has increased by 19,000. The BA job index (BA‑X) – an indicator for the demand for personnel in Germany – rose by 4 points to 108 points in May 2021. This is 17 points higher than the value for May 2020, the month of the previous year already affected by corona. Compared to March 2020, the last month before the first lockdown, there is a drop of 6 points.

Cash benefits

870,000 persons received unemployment benefits in May 2021 – 153,000 fewer than a year ago. In May, there were 3,924,000 persons who were fit to work and eligible to receive basic security benefits for job seekers (German Social Security Code II). Compared to May 2020, this was a decrease of 97,000 persons. This means that 7.2 percent of persons of working age living in Germany were in need of assistance.

Vocational training market

From October 2020 to May 2021, 367,000 persons applied for vocational training through their local Agentur für Arbeit or Jobcenter. That’s 33,000 fewer than in the previous year. The decline is not to be equated with a declining interest of young persons in vocational training. Rather, reports are not made because the usual access routes are blocked and cannot be completely replaced by digital alternatives. 177,000 applicants are still unplaced. At the same time, 451,000 vocational training places were reported, 15,000 fewer than a year ago. This decline reflects the restrictions and uncertainties caused by the pandemic as well as the transformation processes in the economy. Of the training places reported, 234,000 were still unfilled in May. However, the training market is still very much in motion in May. Therefore, it is too early to make an informed assessment.