German unemployment steady, but virus having effect on jobs

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A man wears a face mask as he walks over the Roemerberg square in Frankfurt, Germany, Thursday, Jan. 28, 2021. Further restrictions to avoid the outspread of the coronavirus are discussed Thursday by the German government. (AP Photo/Michael Probst)

BERLIN (AP) — Germany’s job market performed unexpectedly well in January, according to statistics released Friday, though lockdown measures meant to slow the spread of the coronavirus continue to leave their mark on Europe’s largest economy.

The unemployment rate in January remained unchanged at 6% when adjusted for seasonal factors, with 41,000 fewer people out of work, according to the Federal Labor Agency.

Economists had been predicting a slight uptick in number of unemployed and a rise in the adjusted rate to 6.1%.

In unadjusted terms, the headline figure in Germany, the January unemployment rate rose to 6.3% from 5.9% in December, with some 193,000 more people registered as jobless for a total of some 2.9 million out of work.

“All in all, the labor market remained in robust condition in January,” said Federal Labor Agency head Detlef Scheele. “But the measures meant to contain the coronavirus are leaving their mark.”

Like many countries, Germany has implemented widespread restrictions meant to slow the spread of the coronavirus, including shutting restaurants for all but takeout and delivery, bars, and leisure and sports facilities.

Rises in unemployment in Germany, which has Europe’s biggest economy, and elsewhere on the continent have been moderate by international standards. That is because employers are making heavy use of salary support programs, often referred to as furlough schemes, which allow them to keep employees on the payroll while they await better times.

In Germany, the labor agency pays at least 60% of the salary of employees who are on reduced or zero hours.

Separate data showed that Germany’s economy grew only slightly in the fourth quarter of 2020, though the recovery process slowed as new lockdown measures were imposed, the Federal Statistical Office said Friday.

German gross domestic product grew 0.1% over the previous quarter when adjusted for price, seasonal and calendar factors the Wiesbaden-based agency said.

The office had already reported earlier in January that the economy was expected to have “roughly stagnated” during the fourth quarter when it reported that for the year, GDP shrank by 5%.

The office said new lockdown measures implemented in early November had taken their toll on household consumption in particular during the fourth quarter.

“After the historic 9.7% slump of the gross domestic product in the second quarter of 2020, the German economy was recovering in the summer of the year,” the agency said. “In the fourth quarter, however, the recovery process slowed due to the second coronavirus wave and another lockdown imposed at the end of the year.”

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