R 311515Z MAR 09
FM AMEMBASSY BERLIN
TO SECSTATE WASHDC 3721
INFO DEPT OF LABOR WASHINGTON DC
DEPT OF TREASURY WASHINGTON DC
EU MEMBER STATES
FRG COLLECTIVE

UNCLAS BERLIN 000380 
 
 
STATE FOR DRL/ILCSR AND EUR/AGS 
LABOR FOR ILAB (BRUMFIELD) AND BLS (SORRENTINO, 
PSB 2150) 
TREASURY FOR OASIA 
 
E.O. 12958: N/A 
TAGS: ELAB ECON EFIN PGOV GM
SUBJECT: GERMAN UNEMPLOYMENT UP FOR FIFTH 
CONSECUTIVE MONTH 
 
¶1.  Summary.  The usual seasonal labor upswing 
failed to materialize this year as the global 
economic crisis tightened its grip on the German 
labor market.  For the first time in three years, 
unemployment rose in March.  The German labor 
market has deteriorated quickly since November as 
falling exports and the deepening recession 
prompt companies to cut production and jobs. 
Without the widespread use of the so-called 
"short-time work program" by German companies, 
the overall deterioration would be much worse. 
End Summary. 
 
¶2.  Germany suffered its largest increase in 
unemployment in March since the global economic 
downturn began with jobless figures rising for a 
fifth consecutive month, according to newly- 
released Federal Employment Agency data.  Six 
months before the next federal elections in 
September, seasonally adjusted unemployment rose 
by 69,000 month-on-month to 3.4 million in March. 
This was the most significant increase in over 
four years and more than the 55,000 many 
economists had forecast.  The adjusted jobless 
rate rose by 0.1 percentage points to 8.1 
percent.  As a further sign of the deterioration 
of the labor market, the politically more 
important seasonally non-adjusted unemployment 
figure (the one that makes the headline news) 
rose by 78,000 year-to-year to 3.586 million - 
the first time this has happened during the month 
of March since World War II.  The seasonally non- 
adjusted rate now stands at 8.6 percent. 
 
¶3.  The three key indicators of the labor market 
were all negative: unemployment rose, employment 
decreased and demand for labor declined further, 
Employment Agency chief Frank-Juergen Weise 
reported in his press conference, adding that use 
of the so-called short-time work program had 
prevented a bigger increase.  The number of 
workers taking advantage of short time work 
("Kurzarbeit") programs increased to an estimated 
740,000 in February.  The widespread use of 
shorter work hour programs is limiting the 
increase in unemployment and is a sign that 
companies want to keep their staff on pay rolls 
for as long as they can.  Nevertheless, Weise 
expected the job market to deteriorate well into 
2010, and warned that "At the end of 2009, we're 
likely to be near 4 million unemployed."  The 
Employment Agency's economic research institute, 
IAB, said last week that the jobless total may 
increase by an unadjusted 430,000 to 3.7 million 
this year;  the projection assumes an economic 
contraction of 3.5 percent. 
 
¶4.  The sharp decline in the economy has also 
slowed employment growth and reversed the gains 
made in recent years as solid economic growth and 
labor market reforms helped to boost hiring. 
German employment dropped to 39.82 million in 
February, after reaching a record high of 40.3 
million in November last.  Germany's export- 
oriented economy increasingly is affected by the 
waning global demand for manufactured products. 
 
¶5.  More detailed statistical information for all 
of Germany is available at the Federal Employment 
Agency's website: 
http://www.pub.arbeitsagentur.de/hst/services /sta 
tistik 
 
KOENIG