German unemployment rose more than expected as the country slowly emerges from a downturn stoked by the energy crisis and inflation.
(Bloomberg) — German unemployment rose more than expected as the country slowly emerges from a downturn stoked by the energy crisis and inflation.
Joblessness increased by 16,000 in March, the Federal Labor Agency said Friday in a statement. That was more than all of the 20 estimates in a Bloomberg poll of analysts. The unemployment rate ticked up to 5.6% — also higher than predicted.
“Overall, the labor market was robust in March,” said Andrea Nahles, head of Germany’s Federal Labor Agency. “However, the weak economy is leaving its mark: the spring revival is only taking hold in a restrained way.”
Economists expect the German economy to shrink in the first quarter, which would put it into a shallow recession after output contracted 0.4% in the last three months of 2022. But recent data has pointed to growing confidence among businesses that the worst of the energy crunch is over.
The labor market had proven relatively resilient to the fallout from Russia’s war in Ukraine, allowing workers to push for higher wages to protect their purchasing power in the face of inflation that’s still far above the European Central Bank’s 2% goal.
–With assistance from Joel Rinneby, Kristian Siedenburg and Alessandra Migliaccio.
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