German Unemployment Unexpectedly Rises as Risks Increase

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http://www.bloomberg.com/news/2014-09-30/german-unemployment-unexpectedly-rises-as-economic-risks-climb.html

German Unemployment Unexpectedly Rises as Risks Increase
By Alessandro Speciale 2014-09-30T09:10:59Z

German unemployment unexpectedly rose for a second month as seasonal factors combined with economic risks from the Ukraine crisis to a faltering euro-area recovery.

The number of people out of work climbed a seasonally adjusted 12,000 to 2.92 million in September, the Nuremberg-based Federal Labor Agency said today. Economists forecast a decline of 2,000, according to the median of 27 estimates in a Bloomberg News survey. The adjusted jobless rate was unchanged at 6.7 percent, the lowest level in more than two decades.

The German economy, Europe’s largest, contracted in the second quarter and the strength of its rebound is key to reviving growth and inflation in the 18-nation euro area. Data today showed inflation in the currency bloc running at the weakest pace in almost five years and unemployment holding near a record high.

“The current economic slowdown caused by the Ukrainian crisis and other geopolitical risks is likely to cool the labor market temporarily,” said Christian Schulz, senior economist at Berenberg Bank in London. Even so, “the pool of unemployed has shrunk to a level where companies find it hard to find the required qualifications and thus have to resort to hiring from the reserves or from abroad,” he said.