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Bloomberg
German unemployment resumed its rise as factories remained in a slump, increasing the pressure on the government to step in with fiscal stimulus.
The number of jobless climbed by 6,000 in October, compared with estimates for an increase of 3,000. The unemployment rate held at 5%, near a record low. The report follows a survey in October showing manufacturing stuck in a slump and industry employment falling at the fastest pace in almost 10 years.
Germany probably slipped into a recession last quarter (data are due on November 14) and the government is under pressure from the International Monetary Fund and European Central Bank to bolster public spending.
As the euro zone’s largest economy, the country is considered vital for the health of the currency bloc.
Manufacturers are being hit by uncertainty over global trade protectionism, and the auto sector is struggling with a fundamental shift to electric vehicles. While domestic consumption has so far held up, the fear is that the weakness will spread to the services sector as factories dismiss workers.
Chancellor Angela Merkel’s administration has so far insisted that there’s no immediate case to deviate from its balanced budget, a stance backed by Bundesbank President Jens Weidmann.