German Unemployment Falls; Retail Sales Rise More Than Expected
Germany’s unemployment declined in December despite the government tightening the coronavirus containment measures, data released by the Federal Labor Agency showed Tuesday.
Another official data revealed that retail sales growth slowed less than expected in November driven by non-food sector retailing.
The number of people out of work fell 37,000 from November, confounding expectations for an increase of 10,000. Unemployment had decreased by 40,000 in November.
The unemployment rate remained unchanged at 6.1 percent in December, as expected.
“The advertisements for short-time working have increased again – but only to a limited extent,” Federal Employment Agency CEO Detlef Scheele said. “The demand from the companies is stabilizing at a lower level.”
Applications for short-time work increased to 666,000 in December due to the renewed containment measures.
At face value, headline numbers suggest that the German labor market could go through the crisis almost unharmed, Carsten Brzeski, an ING economist said.
However, the rising number of short-time workers, as well as the longer-term impact from the ongoing second lockdown and a high risk of insolvencies in 2021, clearly argue against too much optimism, Brzeski added.
In November, retail turnover climbed by a real 5.6 percent from the previous year, which was faster than the expected growth of 3.9 percent but slower than the 8.6 percent increase logged in October, data from Destatis showed.
Retail sales of food, beverages and tobacco gained only 0.8 percent annually, while non-food retail surged 8.5 percent.
On a monthly basis, retail sales grew unexpectedly by 1.9 percent. Economists had forecast a month-on-month fall of 2 percent after rising 2.6 percent in October.
In comparison to February, the month before the outbreak of Covid-19, the turnover in November was 8.4 percent higher in real terms.
Destatis said retail turnover for the whole year of 2020 was expected to be between 3.9 percent and 4.3 percent in real terms higher than in 2019.