Germany: unemployment rises again. Is the “dream” over?

How is the German economy doing from an employment point of view? There may be a crisis that erases popular support for the government and its green reforms and leads the country towards a social and political crisis.

Let us remember that the crisis of Weimar democracy in the 1930s was not caused by inflation, which nevertheless remains the German mania, but by unemployment, which, curiously, everyone forgets about. Evidently there is a certainty in maintaining well-being and employment which ceases only when the dismissal letter is received.

However, something is starting to make itself felt in the German world of work : Germany's seasonally adjusted unemployment rate rose to 5.9% in November 2023, up from 5.8% in October and slightly above the country's expectations. market by 5.8%.

This is the highest rate since May 2021 as the number of unemployed increased by 22 thousand, reaching a total of 2,702 million. On an annual basis, the number of unemployed recorded a significant increase of 175 thousand units. Regional variations persist, with Bremen and Berlin having the highest unemployment rates, while Bayern and Baden-Württemberg continue to maintain the lowest rates. Meanwhile, in November there were 733 thousand vacancies, 90 thousand less than a year ago

Here is the relative short-term chart:

But here's a vision with a longer time horizon:

If we eliminate the Covid parenthesis and the reaction of employment to the pandemic shock we see how Berlin's privileged situation, which began just as other countries were suffering from the sovereign debt crisis of 2010-15, is over. Now unemployment, which fell to its lowest level until 2019, when the prices of energy from Russia were ridiculous, is rebounding and has started to grow again.

For now it is a minimal upward rebound, but it is there, and we need to see what the effect of the Scholz government's fiscal and environmental policies will be. If, as it seems, we proceed along the same previous path without changes, we will have a further increase in unemployment which could easily reach 6.5% or 7% if not higher. A very high value by German standards.

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The article Germany: unemployment rises again. Is the “dream” over? comes from Economic Scenarios .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-la-disoccupazione-torna-a-salire-il-sogno-e-finito/ on Fri, 01 Dec 2023 16:05:38 +0000.