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German Jobless At 3.46mil, 8.3%

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http://www.bloomberg.com/apps/news?pid=206...id=a0HSj25Q3RmI

German July Unemployment Rises as Job Cuts Continue (Update1)

By Rainer Buergin and Christian Vits

July 30 (Bloomberg) -- German unemployment rose in July as companies cut jobs to protect profits even as signs mount that the worst of the recession may be passed.

The number of people out of work increased 52,000 to 3.46 million on an unadjusted basis, the Nuremberg-based Federal Labor Agency said today. The seasonally adjusted total fell by 6,000 due to statistical changes. Without the impact of the changes, the office estimates unemployment rose by 30,000.

“The effects from the downturn are relatively moderate so far,†said Labor Agency President Frank-Juergen Weise. “The strong use of short-time work is stabilizing the labor market.â€

German business confidence increased for a fourth month in July and consumer sentiment also rose as Chancellor Angela Merkel’s 85 billion-euro stimulus package feeds into the economy. Two months before national elections, companies from Deutsche Lufthansa AG to Siemens AG are continuing to cut jobs.

Siemens, Europe’s largest engineer, said on July 22 that it plans to cut an additional 1,400 jobs as it strives to meet profit targets for the year. Lufthansa and Jungheinrich have also announced cuts this month.

‘Only Slightly’

The adjusted jobless rate in Germany was unchanged at 8.3 percent in July, today’s report said. The euro was little changed against the dollar at $1.4055 as of 9:27 a.m. in London. It had earlier risen to 1.4095.

Germany’s economy shrank 3.8 percent in the first quarter, the biggest drop since data were first compiled in 1970. It contracted “only slightly†in the second quarter, the Bundesbank said July 20. The Federal Statistics Office in Wiesbaden will publish second-quarter figures on Aug. 13.

Merkel is counting on the stimulus plan as she battles lengthening jobless lines before the Sept. 27 election. The measures include subsidizing social insurance payments to persuade companies to keep workers on shortened shifts when orders are slack. The Cabinet in May extended the facility for each worker to 24 months from 18 months.

‘Lagging’

German unemployment began to increase in November after falling steadily for more than three years. The estimated 30,000 increase in adjusted unemployment in July was less than the 43,000 median forecast of 28 economists surveyed by Bloomberg News.

“The reason that unemployment surprised to the downside is the extension of the reduced working-hours subsidies,†said Dominic Bryant, an economist at BNP Paribas in London. “When the subsidies run out, unemployment is likely to jump.â€

The German economy, Europe’s largest, will probably shrink 6.1 percent this year, the Organization for Economic Cooperation and Development said June 24. The unemployment rate will rise to 8.7 percent this year and 11.6 percent in 2010, it said.

According to the latest comparable OECD data, Germany’s jobless rate held at 7.7 percent in May. The unemployment rate in the U.S. was 9.4 percent and France’s was 9.3 percent.

In western Germany, the number of people out of work rose by a seasonally adjusted 2,000 in July, while the number in eastern Germany fell by 8,000, today’s report showed.

Short-time subsidised working = increased national debt = not sustainable.

Short time non-subsidised working = effective pay cut = reduced tax take = increased national debt = not sustainable.

Unemployment is only going one way. And while it does, wages and prices are only going in the other.

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Yep, gordo isn't the only politician in Europe trying to sweep problems under the carpet in a bid to get re-elected.

Angie M is pulling all the stops: first the German bad bank, now this - and the finishing line is ominously close for her (september)

:ph34r:

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German unemployment rose in July as companies cut jobs to protect profits even as signs mount that the worst of the recession may be passed.

Love the bit of economic cheerleading at the beginning.

The worst is over, and the recession has ended but just to make sure it's over we are sacking you.

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German economy is the real economy and this makes it a weather bell

The consensus there is that:

- the pace of falls in factory orders is slowing

- the recovery is NOT on the horizon

- in the mid-term (5-10 years) pre- 2007 growth rates will NOT be achieved

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http://www.bloomberg.com/apps/news?pid=206...id=a0HSj25Q3RmI

German July Unemployment Rises as Job Cuts Continue (Update1)

By Rainer Buergin and Christian Vits

Short-time subsidised working = increased national debt = not sustainable.

Short time non-subsidised working = effective pay cut = reduced tax take = increased national debt = not sustainable.

Unemployment is only going one way. And while it does, wages and prices are only going in the other.

You are right, although many German companies are now recovering their order numbers etc.

Unemployment going up does however not mean that prices go down.

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This shows the falacity of making things for a living. When times are bad people stop buying and you're out of work.

Now, in the UK, we mainly sell each other dodgy financial products or shuffle paper in the public sector, which is sensible because it's recession-proof.

Those Germans are such dumkopfs - making things is very last century. :lol:

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This shows the falacity of making things for a living. When times are bad people stop buying and you're out of work.

Now, in the UK, we mainly sell each other dodgy financial products or shuffle paper in the public sector, which is sensible because it's recession-proof.

Those Germans are such dumkopfs - making things is very last century. :lol:

Or dodgily made houses

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The key observation to German unemployment figures is that their statistical methods are more representative of reality than ours. Every government statistic in the UK has been caveat laden to nonsense.

Order books are probably improving because the luxury cream is off the pudding and what remains is mostly nuts-and-bolts manufacturing activity. Germany makes most of the machine parts, cables and things that Europe uses in its infrastructure. Stuff will still need maintenance parts in short.

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The key observation to German unemployment figures is that their statistical methods are more representative of reality than ours. Every government statistic in the UK has been caveat laden to nonsense.

Order books are probably improving because the luxury cream is off the pudding and what remains is mostly nuts-and-bolts manufacturing activity. Germany makes most of the machine parts, cables and things that Europe uses in its infrastructure. Stuff will still need maintenance parts in short.

Order books are not improving

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The key observation to German unemployment figures is that their statistical methods are more representative of reality than ours. Every government statistic in the UK has been caveat laden to nonsense.

Order books are probably improving because the luxury cream is off the pudding and what remains is mostly nuts-and-bolts manufacturing activity. Germany makes most of the machine parts, cables and things that Europe uses in its infrastructure. Stuff will still need maintenance parts in short.

What is most. does Germany make 99% machine parts, cables and things that Europe uses in its infrastructure or 51%?

If you have some facts I would be interested to know. I seem to recollect that the new trains for the Olympics are made in Japan is that not infrastructure? Are you saying that all the Tarmac used for the roads in Europe is made in Germany. Are all the fibre optic cables for the broad band made in Germany? Is the earth moving equipment for Construction soley made in Germany?

I think you might find if you did a bit of research that Germany makes expensive cars, expensive household goods (fridges freezers, cookers, showers etc), lots of solar panels, power stations, Chemicals, drugs and heavy machine tools.

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Order books are not improving

Wrong - they are:

http://www.bloomberg.com/apps/news?pid=206...id=a_C39RZK.tEs

Manufacturing orders rose for a third month in May, exports gained and industrial production surged the most in almost 16 years. At the same time, German investor confidence unexpectedly fell this month, the ZEW Center for European Economic Research said on July 14.

A lot better than our industries at present.

Edited by BalancedBear

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Wrong - they are:

http://www.bloomberg.com/apps/news?pid=206...id=a_C39RZK.tEs

A lot better than our industries at present.

Does it really say that?:

http://www.cesifo-group.de/portal/page/por...ournal/60publkp

"Current issue:

Ifo Konjunkturperspektiven 7/2009

Results of the Ifo Business Survey for July 2009

Manufacturing: Outlook continues to brighten

In manufacturing (including food and beverages) the business climate indicator rose again. For the seventh time in succession the sceptical responses regarding the business expectations declined. However, there was little change in the unfavourable business situation; in comparison to the previous month only a slightly smaller number of firms reported an unsatisfactory business situation. The decrease in demand has almost come to a standstill according to the responses of the survey participants, and finished goods inventories have again been reduced. Considerably fewer firms assessed order reserves as "too small"; the depth of orders on hand, however, at 2.3 months is still clearly below the previous year level (3.0 months). Equipment and machinery was utilised at a 71.8% rate, on average, which was lower than twelve months ago (86.0%), in comparison to the first quarter (71.3%), however, the utilisation rate has recovered somewhat. Firms' production plans call for fewer restrictions than in June. Only a small number of survey participants still expect the decline in export business to continue.

Construction: Slightly improved business climate

The business climate in construction was a little more favourable in July than in the previous month. The contractors participating in the Ifo Business Survey were less dissatisfied with the current business situation; with regard to business developments in the next six months, their reserve has also decreased somewhat. Almost 40% of the survey participants reported hindrances in building activity, the largest factor being insufficient orders. The equipment utilization rate rose one percentage point to 69% (seasonally and weather adjusted), thus matching the previous year value. The depth of order stocks increased insignificantly to 2.4 months (seasonally and weather adjusted) on average for all construction sectors; a year ago the order cushion was somewhat larger (2.5 months). The survey responses indicate that prices remained under pressure in July. In the opinion of the survey participants, they will have to lower prices only moderately in the coming months, however. Personnel reductions in the coming months are only planned to a small extent.

Wholesaling: Declining scepticism

The business climate in the wholesale trade improved again in July. In comparison to June, the firms were less often dissatisfied with the business situation. In individual cases too high inventories have been reduced. The scepticism with regard to future developments continued to weaken. In light of the less negative business outlook, the survey participants have upped their order plans, which, however, are still lower than one year ago. Restrictions are also evident in their employment plans. Prices are expected to increase in the coming months, in the opinion of the wholesalers.

Retailing: More favourable business situation

The business climate in retailing worsened slightly in July. This is because the firms have assessed their six-month business outlook more unfavourably than in June. Their current business situation, however, is regarded as almost satisfactory and thus clearly more positive than in June. Although the retailers more frequently assessed their inventories as too large, they do not intend to be as restrictive in their order plans as before. Once more, fewer firms reported having to make price concessions. For the coming months the survey results indicate that prices will remain stable. The number of employees in retailing is also expected to undergo little change.

Services: Climate indicator rises

The Ifo Business Climate for the service sector (excluding trade, banking, leasing, insurance and the public sector) improved in July. The surveyed firms assessed their current business situation less unfavourably than in June but expect only a minimal growth in turnover in the near future. In their business expectations for the coming half year, scepticism has weakened further, however. The service providers anticipate an unchanged business situation in the coming months. Their personnel plans foresee no changes in staff levels."

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You are right, although many German companies are now recovering their order numbers etc.

Unemployment going up does however not mean that prices go down.

Prices can't go down can they, they have to keep the profits up.

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