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Germany's 2018 unemployment hits record yearly low

January 4, 2019

The average number of job seekers in Germany was lower in 2018 than at any time since reunification in 1991, the Federal Labor Agency has said. Welfare numbers have also dropped, though the system is still controversial.

People work in a factory in Germany
Image: Imago/STAR-MEDIA

German annual unemployment figures for 2018 fell to record lows, though the number of job seekers increased from November to December of last year, the Federal Labor Agency (BA) reported on Friday.

The Labor Agency released statistics for the last month of 2018, as well as year-end figures, during a press conference at their offices in Nürnberg.

Details of the report

  • The yearly average of registered unemployed for 2018 fell 193,000 to 2.34 million, the lowest number since German reunification in 1991.
  • This drop brought the average yearly unemployment rate to 5.2 percent, a drop of 0.5 percent compared to 2017.
  • From November to December 2018 the number of job seekers rose 23,000 to hit 2.21 million.
  • This marked a 0.1 percent increase from November, bringing the unemployment rate in last month of the year to 4.9 percent. 

Labor agency analysis: Seasonal trend

  • Labor officials attributed the rise in December unemployment numbers to seasonal industries that lay off workers during the colder months.
  • When such jobs are factored out, the number of unemployed actually fell by around 14,000 individuals from November to December, the Labor Agency said.
  • Labor Agency head Detlef Scheele described the overall situation as positive: "The labor market has continued its strong development, even though upward trends in the economy have lost a little steam."
  • Scheele added he was particularly glad to see the number of long-term unemployed fall and progress integrating refugees into the German labor market.

Migrants in German work force

Crucial moment in German economy

The historically low annual numbers for German unemployment came as some analysts have expressed concern over a potential slowdown in the German economy due to global trade tensions, market volatility and challenges to traditional stalwarts of the German economy, such as the auto industry.

Some economists have also warned that more and more Germans may be working, but are underemployed in precarious, low-wage jobs.

Record low for welfare recipients

One day prior to the release of the labor market statistics, the Labor Agency told the Frankfurter Allgemeine Zeitung (FAZ) that the number of recipients of Hartz IV, Germany's system of long-term unemployment benefits, had also hit a historic low.

  • In November 2018 some 5.9 million individuals, were drawing Hartz IV benefits.
  • This was a drop of 600,000 households, or 17 percent, since Hartz IV was introduced in 2008, bringing the number of recipients to a record low.
  • The record low was particularly impressive, given that the Hartz IV system had taken up some 750,000 aslyum-seekers since 2015, the FAZ wrote.

Controversial reform

Hartz IV has been controversial since its introduction in 2005 under then Chancellor Gerhard Schröder, a Social Democrat (SPD). Top SPD politicians today continue to call for the system's to be massively overhauled.

cmb/kms (AFP, KNA, dpa)

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