In what could be a good omen for Gerhard Schröder's reelection bid, unemployment figures in Germany dropped slightly during the month of August, partially due to reconstruction efforts following devastating floods.
Fewer people on the dole in August
With only two weeks left to go before national elections, the German government released its latest figures for unemployment on Thursday.
In August, 4,018,200 Germans were jobless. Though the figure remained above the psychologically important four-million mark, there were 28,700 fewer unemployed Germans than in the previous month, which could bring some good news to Chancellor Gerhard Schröder's reelection bid.
In contrast to the previous year, however, the figures were less bright. 229,400 more people found themselves without work in August than during the same period last year. At the same time, the unemployment rate in August did decrease from 9.7 to 9.6 percent.
Releasing the figures on Thursday, Florian Gerster, head of the Federal Labor Office in Nuremburg, said Germany was still in the beginning phase of an economic recovery. For that reason, he said, the labor market had still not improved significantly.
Gerster said he was optimistic that the unemployment rate would fall below the four million mark during the months of September and October. He offered less optimism for a full recovery for the German economy, which he now forecasts can first happen at the start of the new year.
Gerster said seasonal factors contributed to the slight decrease in unemployment figures. If those factors are stripped from the figure, however, there was an actual increase of 2,000 unemployed people during the month of August, with a total of 4.104 million.
The Social Democrats sought to play down that increase on Thursday. Federal Labor Minister Walter Riester said the labor market is already showing signs of improvement. After dropping seasonal factors, he said, the increase in the unemployment rate had virtually come to a halt. "This is a harbinger of the easing of the labor market that we are expecting during the second half of the year," he said.
But there is a silver lining in the figures: Unemployment in Germany's economically disadvantaged eastern states, formerly belonging to communist East Germany, showed a sharp decline in unemployment, with 23,600 more people finding themselves gainful employment than in the previous month. The government partially attributed that shift to new employment opportunities related to clean up and reconstruction following last month's devastating floods in the areas surrounding the Elbe River.