Forex Flash: Gradual slowing of German labour market continues - ING

Share | (Barcelona) - German unemployment increased by a non-seasonally adjusted 66,900 in July, bringing the number of unemployment to the highest level since April. According to Carsten Brzeski, economist at ING as a warning signal, "this is the strongest July worsening since 2004."

Brzeski also explained that the looming slowing of the German labour market could also put a quick end to a tender new trend: labour mobility in the Eurozone. The absence of labour mobility is often cited as one of the main problems of the monetary union. However, the current crisis has actually led to first signs of (involuntary) labour mobility; from the Eurozone periphery to Germany. Sine 2008, immigration to Germany from Spain and Greece has more than doubled. While during the same period, German employment increased by more than 3%, the number of employees with a Portuguese, Spanish or Italian nationality increased by around 6%. The number of employees with a Greek nationality increased by less than 3%. "Although there still is a lack of highly skilled workers and experts in some sectors (eg in engineering), the cooling of the German labour markets should limit possibilities for further Eurozone labour market mobility," he said

"All in all, the German labour market is clearly losing momentum. Given the high level of employment, there is no need to panic. However, indications are increasing that light-hearted times are coming to an end." ING economist concluded.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Forex and Currencies

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