German unemployment up more than expected in December

The number of people out of work in Germany rose more than expected in December, according to figures released by Destatis on Friday, but the unemployment rate was steady.

Unemployment claims rose by 8,000 last month compared to a 14,000 decline in November, coming in worse than expectations for a 2,000 increase.

However, the headline unemployment rate was unchanged at 5% in December, in line with consensus expectations.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "A poor finish to 2019 in the German labour market, but an increase in claims was all but guaranteed given the significant decline recorded in November. Overall, joblessness has now been rising slightly since the middle of last year - not factoring-in the jump in May due to re-classification of some workers - consistent with a lagged response to the sharp slowdown in GDP growth.

"The headline unemployment rate, however, has been roughly steady due to still-solid overall employment growth - 0.7% y/y in November - a trend that should continue this year. That said, we still think that the unemployment rate will increase by a few tenths of a percentage points in the next six-to-nine months. The deterioration in the labour market is further marked by the fact that vacancies are now sliding rapidly, extending a trend that also began in the middle of the year."