Business News
German unemployment set to climb in wake of economic slump
Jul 30, 2009, 1:04 GMT
Berlin - German unemployment jumped in July, data to be released Thursday is forecast to show, amid expectations that the nation faces a surge in the numbers out of work in the wake of the global economic slowdown.
Analysts expect the Federal Labour Office will say seasonally adjusted unemployment, which reflects overall trends in the job market, climbed by 50,000 this month to 3.545 million.
This will push the jobless rate up to 8.4 per cent, from 8.3 per cent in June analysts said.
The forecast rise in July unemployment follows a 31,000 increase in June, which resulted in the numbers out of work rising to 3.495 million.
Up until now, government subsidized short-term work contracts have helped companies avoid mass layoffs despite the weakening economic environment.
But the Paris-based Organization for Economic Cooperation and Development has forecast that German unemployment will hit 11.6 per cent in 2010.
Economists expect the German economy to contract by a sharp 6 per cent plus this year.
The projections of rising unemployment also comes in the buildup to September's general election in Germany with Chancellor Angela Merkel's government facing the prospects of heading into the polls against the backdrop of lengthening jobless queues.
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