German unemployment stable in December

FRANKFURT AM MAIN: German unemployment held steady in December, official data showed Tuesday, as government measures that closed most shops over the Christmas period caused a jump in those on short-time work.

The seasonally adjusted jobless rate in Europe's top economy stood at 6.1 percent in December, the same as in November, after three months of falls, according to the BA federal labour agency.

Unemployment fell by 37,000 people, seasonally adjusted, to 2.7 million, although the figure is still nearly half a million higher than in December 2019.

Germany tightened virus restrictions last month, closing non-essential shops after already shuttering culture and leisure facilities in November.

The shutdowns prompted employers to rely more heavily on a government-subsidised scheme that allows them to reduce workers' hours to avoid layoffs.

BA data showed another 660,000 people were placed on short-time employment between December 1 and 28.

Most observers expect the curbs to continue until the end of January as infection rates remain stubbornly high in the country.

Germany on Tuesday reported 11,897 new coronavirus cases and 944 deaths, ahead of a meeting between Chancellor Angela Merkel and regional leaders to decide on extending the shutdowns.

"The rising number of short-time workers, as well as the longer-term impact from the ongoing second lockdown and a high risk of insolvencies in 2021, clearly argue against too much optimism," said ING bank analyst Carsten Brzeski.

BA chairman Detlef Scheele said the pandemic was having a "very visible" impact on Germany's labour market.

"The stabilising effect of short-time work has, however, secured employment and prevented higher unemployment," he added.

Before the coronavirus, Germany's unemployment rate had hovered at a record low of around five percent.