German jobs market cools in October, adding to calls for fiscal stimulus

German unemployment rose only slightly more quickly than expected in October as the country's economy fell into a recession, but some economists said that might be enough to push policymakers to enact fiscal stimulus.

According to the Federal Labour Office, in seasonally adjusted terms, the number of jobless in the euro area's largest economy increased by 6,000 in October (consensus: 3,000) to reach 2.287m, although the rate of unemployment held at 5.0%, the same level as in the month before and near the record low of 4.9% plumbed earlier in the year.

A slide in the number of job vacancies also accelerated.

Separately, employment figures published on Wednesday revealed that the year-on-year rate of growth slipped from 0.8% in August to 0.7% for September.

In December 2018 it stood at 1.2%.

"Claims are increasing relatively slowly, and employment growth is still positive. We estimate the the jobless rate will increase by 0.2pp in the next six-to-nine months, primarily in H1 next year," said Claus Vistesen at Pantheon Macroeconomics.

"The question everyone is asking is whether this will be enough to push Berlin to lift fiscal stimulus. We think it will, mainly because the hit to employment in manufacturing—which is a key political sector—is much worse than the headline data imply."

Data due to published on 14 November, were expected to show that the economy fell into a technical recession in the third quarter following two consecutive quarters of contraction.