IAB: Unemployment continues to decline – but more slowly

Released on 26.10. 2021

  • The IAB presents new figures on the labor market. Photo: Daniel Karmann

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The labor market barometer fluctuates between 90 and 110 – the value 100 would reflect a neutral situation on the labor market. How does it currently look?

Nuremberg (dpa) – The German labor market will be a bit frostier at the end of the year – but unemployment should continue to fall.

The labor market barometer of the Nuremberg Institute for Employment Research (IAB) fell for the second time in a row in October after an extremely strong summer, as the institute announced on Tuesday.

With 104, 7 points, the barometer fell by 1.5 points in October and thus quite significantly. In a long-term comparison, this is still a good value: The barometer fluctuates between 90 and 110 – the value 100 would reflect a neutral situation on the labor market.

The indicator suggests that the labor market is continuing to develop favorably, albeit at a restrained pace, reported the IAB . “After the furious catch-up race from the summer, the positive labor market development is taking a more moderate course,” said Enzo Weber, head of the IAB research department for forecasts and macroeconomic analyzes. The Federal Employment Agency will present its October statistics this Thursday.

The employment component of the barometer, which only declined slightly in October, remains positive. This shows that the companies in Germany want to continue to hire. “Employment should be supported by the re-entry of people who had withdrawn from the labor market during the crisis and by short-term catch-up effects in connection with migration,” said the IAB.

The In contrast, the unemployment component of the IAB labor market barometer fell sharply in October by 3.0 points to 102, 7 points. This still signals falling unemployment, but it is falling significantly more slowly than in the phase immediately after the lockdown. «The demand for labor remains high. However, unemployment will not fall any longer as quickly. After the crisis, which lasted 1.5 years, there are risks of a consolidation in the form of higher long-term unemployment, “said Weber.

The IAB labor market barometer has been measuring since November 2008 as a leading indicator, the situation on the German labor market. It is based on a monthly survey by the Federal Employment Agency among all employment agencies.

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