Unemployment Declined In Germany, Amid Signs Of Recovery

Daily Forex Fundamentals | Written by ecPulse.com | Oct 29 09 09:36 GMT |

Despite the vivid recovery signs in the largest economy in the euro zone spurred by Germany, the largest economy in the 16-nation economy, the escalating unemployment rate is threatening recovery and putting more pressure on the German government. The current rate of unemployment in the euro zone is 9.6%, the highest in more than 10 years. However, today, Germany released its jobless rate for October coming in at 8.1%, lower than the previous 8.2% and median forecasts of 8.3%. The rate improved slightly in October, but it is still high. Many companies shed jobs to cut costs to return to profitability. For instance, Siemens AG announced previously that it has slashed the number of workers from all its affiliates to 408,000 this year from roughly 420,000. Also, there are other companies planning to terminate more employees which may cause the number to become scarier in the coming period. The Bundesbank predicts the rate of unemployed people to rise to 10.5% in 2010. However, the gigantic economy grew 0.3% in the second quarter, leading the recovery in the euro zone; still the unemployment is considered the major problem. The German economy improved since the second quarter and the progress continued in the third quarter; however, there have been volatility in the data released recently which is raising concerns that the recovery may be slow. The German chancellor Angela Merkel launched 85 billion euros plan to reinvigorate the economy in addition to the 60 billion euros stimulus introduced by the ECB to pump liquidity and boost lending and thereby spending. The expansionary fiscal and monetary policies adopted by the ECB and European national governments managed to ease the contraction. Eyes in the coming period will be focused on GDP for the third quarter where positive growth figures are expected. IW economic institute projects the German economy will shrink 4.5% in 2009, before growing to 1.5% next year. The important question now is can Germany and France pull the euro zone out of recession Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk