Unemployment Claims Trending Higher As Labour Market Cools Slightly

German unemployment claims data released today saw an eleventh consecutive monthly rise in December on a seasonally adjusted basis, rising +5k to 2703k, the highest since May 2021.

• The seasonally adjusted unemployment rate rose to 5.9% (vs 5.8% prior).
• The number of employees receiving a state benefit on temporarily reduced hours by the employer (“Kurzarbeitergeld”) rose to 179k in October (latest datapoint available, up from 150k in September and 111k in August), which was likely driven by the weak manufacturing sector in Germany. However, on a historical comparison, figures are still reasonably low (Apr’20 high of over 6000k).
• The expected number of employees impacted by Kurzarbeit, which has to be reported in advance by companies and can be interpreted as an early indicator for future utilization of the state benefit, also stood at a slightly higher level in December than in November.
• Looking at employment figures for November, which were released earlier today, total employment extended its all-time high by +38k (+0.1%), standing at 46.1m. Parts of this increase can be attributed to seasonality: on a SA basis, employment rose by a lesser +19k (+0.0%).
• On an annual comparison, employment numbers are trending upwards but the increase is slowing (+0.4% Y/Y vs +0.5% Y/Y Oct/Sep).
• From a broader perspective, the German labour market is doing reasonably well given the weak economic situation but seems likely to continue getting slightly looser - the IFO employment subindices are trending lower, while December's manufacturing PMI saw “solid and slightly accelerated decreases in both output and employment”.