The labour market in July 2021


Further significant improvement

29 Jul 2021 | Press Release No. 29

“The situation on the labour market continues to improve. Unemployment and underemployment continued to fall strongly despite the start of the summer break. Employment growth continues. And companies are increasingly looking for new staff,” said Detlef Scheele, Chairman of the Federal Employment Agency (BA), today at the monthly press conference in Nuremberg.

Unemployment rate in July:

- 24,000 – now 2,590,000

U nemployed persons compared to last year:

-320,000

U nemployment rate compared to last month:

-0.1 percentage points to 5.6 percent

Unemployment and underemployment

With the extensive steps to re-open these last months, the number of unemployed in July 2021 – unlike usual during this month – decreased by 24,000 to 2,590,000 compared to the previous month. Seasonally adjusted, it fell sharply by 91,000. The unemployment rate fell by 0.1 percentage points to 5.6 percent. Compared to July of last year, the unemployment rate has dropped by 320,000. The unemployment rate recorded a decrease of 0.7 percentage points compared to the previous year. The consequences of the Corona crisis have amounted to an increase of 316,000 unemployed or 0.7 percentage points in the unemployment rate. These values have now roughly halved compared to the peak in summer 2020 due to the recovery of the labour market. The unemployment rate determined according to the ILO employment concept by the Federal Statistical Office was 3.7 percent in June.

Underemployment, which also takes into account changes in labour market policy and short-term incapacity to work, was at 3,379,000 in July. That is 294,000 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 the data obtained so far, short-time working arrangements were reported for 75,000 people from 1 to 25 July due to the economic situation.

Current data on actual take-up is available until May 2021. According to preliminary extrapolated data from the Federal Employment Agency, cyclical short-time allowance was paid to 2.23 million workers this month. The take-up rate thus continues to decline. In April 2020, it had peaked at just under 6 million.

Labour force participation and employment

Employment and employment subject to social security contributions are currently showing an upward trend. According to the Federal Statistical Office, the number of persons participating in the labour force (according to the domestic concept) rose by 76,000 in June 2021 compared to the previous month, seasonally adjusted. There are now 44.84 million persons in employment – 162,000 more than last year. Employment subject to social security contributions, whose data only extends to May 2021 and thus does not yet fully capture the effect of the re-opening steps, increased by 31,000 in this month on a seasonally adjusted basis. Compared to the previous year, employment subject to social security contributions rose in May by 402,000 to 33.73 million, according to BA extrapolations. Marginal employment is still being strongly affected by the measures to contain the Corona pandemic. It amounted to 6.99 million in May 2021.

Labour demand

Demand for new staff picked up strongly in July. 744,000 jobs were reported to the BA, 171,000 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 41,000. The BA job index (BA‑X) – an indicator for the demand for personnel in Germany – rose by 7 points to 121 points in July 2021. This is 29 points higher than the value for July 2020, the month of the previous year already affected by Corona. The BA-X also exceeds the value of March 2020, the last reporting month before the effects of the pandemic measures became visible on the labour market.

Cash benefits

805,000 persons received unemployment benefits in July 2021 – 303,000 fewer than a year ago. In July, there were 3,855,000 persons who were fit to work and eligible to receive basic security benefits for job seekers (German Social Security Code II). Compared to July 2020, this was a decrease of 152,000 persons. This means that 7.1 percent of persons of working age living in Germany were in need of assistance.

Vocational training market

From October 2020 to July 2021, 404,000 persons applied for vocational training through their local Agentur für Arbeit or Jobcenter. That’s 35,000 fewer than in the previous year. The decline is not to be equated with a declining interest of young persons in vocational training. Rather, many reports were not made because the usual access channels were impaired and could not be completely replaced by digital alternatives. 127,000 applicants were still unplaced in July. Since October 2020, 485,000 training places have been reported, 14,000 fewer than a year ago. Of the training places reported, 194,000 were still unfilled in July. Overall, an increasing improvement in the vocational training market is noticeable. Based on experience, the vocational training market is still very much in motion during the summer months. Many companies are still making decisions and many young people are still searching for a training place or are switching to an alternative.

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