Unemployment in Germany increased to its highest in over 30 months during November, showed new data just a day after Angela Merkel the Chancellor unveiled her coalition plans to roll back reforms that over the past decade were credited with helping the labor market.
Those people without work increased in November for the fourth straight month to 2.98 million on an adjusted basis for the season. The increase of 10,000 was much more than the 1,000 that had been forecasted by economists.
Large corporations in Germany have said they plan to slash jobs with machinery and construction group Bauer set to cuts its employees by up to 3% and RWE the utility planning to lay off thousands.
The rate of unemployment did not change from 6.9%, which is near its lowest level since Germany was reunified over two decades ago. It is also a level that crisis hit countries like Spain and Greece can only dream about as over 25% of the people in those two countries are out of work.
However, the leading institutes in economics in Germany warned that its plans to introduce an 8.50 euros an hour minimum wage, as agreed to in the coalition deal on Wednesday by Social Democrats and Merkel, could lead to more losses of jobs.
Data released early on Thursday indicated the number of working was at a record high of over 42 million, only the second time the threshold of 42 million had been reached since the 1990 reunification.
The is good for domestic demand, which Berlin relies upon to boost its growth this year, as the export driven economy that has been the tradition, suffers from less demand from across the euro zone and the slowdown in the world’s emerging markets.
Robust hikes in wages, low interest rates and moderate inflation have encouraged Germans, which are traditionally a nation that saves money, to spend more cash.
Morale amongst consumers was up to a high of 6-years leading into December.
