FRANKFURT — The German economy remained mostly immune to the malaise afflicting the rest of the euro zone in December, with data released Tuesday showing that unemployment fell slightly during the month and that the average number of jobless people for the full year was the lowest in two decades.
With nearly half a million job openings, Germany appears likely to continue to resist the downward pull of the sovereign debt crisis, at least for several months. The seasonally adjusted unemployment rate fell to 6.8 percent in December from 6.9 percent in November.
The jobless figures came after a number of recent indicators that have been better than expected, helping to drive increases in European stock indexes on Tuesday.
But economists question whether Germany, which has Europe’s largest economy, can remain unaffected by the recession spreading across the rest of the Continent. The German jobless rate contrasts with that of the euro area as a whole, at more than 10 percent.
“Germany is no island, and its economy will rock in this crisis just like any other,” Carl B. Weinberg, chief economist of High Frequency Economics, wrote in a note to clients on Tuesday.
Just how much is a matter of renewed debate, after a number of recent indicators were not quite as bad as economists expected. For example, a survey of British purchasing managers published on Tuesday by the data provider Markit Economics was better than analysts forecast, in part because of an improvement in exports.
Confidence in the euro zone has improved somewhat after the European Central Bank in December flooded banks with low-cost loans, which also helped to push down short-term borrowing costs for some countries. An improving United States economy would also help Europe, which exports many of its goods to the country.
“Uncertainty is still high,” said Eckart Tuchtfeld, an economist at Commerzbank in Frankfurt. “However, for the time being the situation does not seem to be deteriorating sharply.” As long as there is no acceleration of the sovereign debt crisis, Mr. Tuchtfeld said, “we are pretty confident it might not get as bad as people have been expecting.”
The German labor market continues to benefit from changes in 2005 that removed some job protections and put more pressure on unemployed people to look for work. The changes helped German companies become more competitive and take advantage of surging demand for industrial goods from China and other developing countries.
Rigid labor rules in other countries are among the root causes of the debt crisis, economists say. Unemployment stands at more than 18 percent in Greece and nearly 23 percent in Spain. A lack of growth and competitiveness have amplified the two countries’ debt problems.
Germany had its best year almost since reunification in 1990. The average number of unemployed workers in Germany averaged less than three million for all of 2011, a rate of 7.1 percent, the lowest level since 1991.
German companies continue to look for workers despite signs of a slowdown. The number of unfilled jobs in December was 467,000, the German Federal Employment Agency said, an increase of 87,000 from a year earlier. Almost all industries were looking for workers, especially in fields like electronics, machinery and health care.
Mr. Tuchtfeld said unemployment was likely to rise in the spring, but not drastically. Companies will probably take advantage of government subsidies that encourage them to put workers on reduced hours rather than cutting jobs. Such programs allowed German unemployment to fall during much of 2009 despite a sharp downturn.
Without adjusting for the rise in unemployment that is typical for December, the German jobless rate rose to 6.6 percent from 6.4 percent. But there were still 231,000 fewer jobless people than in December 2010.
Article source: http://www.nytimes.com/2012/01/04/business/global/german-joblessness-falls-to-lowest-level-in-two-decades.html?partner=rss&emc=rss
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