German jobless rate falls in September, fewer on furlough

BERLIN (AP) — Germany’s unemployment rate declined in September despite the coronavirus pandemic, official data showed yesterday. Jobless figures have been kept lower by extensive use of a short-term salary support programme, but estimates show that the number of people receiving that support is also falling.

The unadjusted jobless rate, the headline figure in Germany, was down to 6.2 per cent from 6.4 per cent in August, the Federal Labour Agency said.

Some 2.847 million people were registered as unemployed — 108,000 fewer than the previous month, but 613,000 more than a year earlier.

That jobless rate stood at five per cent in March, the last month before the impact of the pandemic was reflected in unemployment figures.

In seasonally adjusted terms, unemployment dipped to 6.3 per cent in September from 6.4 per cent in August.

People wear face masks as they walk away from a subway station in Frankfurt, Germany on September 24. PHOTO: AP

Rises in unemployment in Germany and elsewhere in Europe have been moderate by international standards because employers are making heavy use of salary support programmes, often referred to as furlough schemes, that allow them to keep employees on the payroll while they await better times.

In Germany, Europe’s largest economy, the labour agency pays at least 60 per cent of the salary of employees who are on reduced or zero hours.

The labour agency said yesterday it paid out for 4.24 million people in July, the most recent month for which it has figures. That was down from 4.63 million in June and a peak of 5.95 million in April, but far above the pre-crisis level in February of just 134,000. Germany has 83 million inhabitants.

The Ifo economic think-tank said this week that, according to its calculations, the number of people in the programme was down to 3.7 million in September, though the number remains relatively high in manufacturing industry.

Germany won’t be scaling back the programme soon. The governing coalition has agreed to allow employees to remain in it for up to 24 months rather than the regular 12.

Germany started easing coronavirus restrictions in late April, but some remain. A recent increase in new infections has caused concern, prompting plans for restrictions on private gatherings in places where cases spike. The government is keen to keep businesses and schools open.