German unemployment rises less than expected in November, labour office says
Economic weakness weighs, says labour office head
Analyst: unemployment set to keep rising next year
Firms more cautious on personnel, says Ifo
Adds economists' comments and context in paragraphs 6-9, 14-16
By Maria Martinez
BERLIN, Nov 29 (Reuters) -The number of people out of work in Germany rose less than expected in November, federal labour office figures showed on Friday.
The office said the number of unemployed increased by 7,000 in seasonally adjusted terms to 2.86 million. Analysts polled by Reuters had expected that figure to rise by 20,000.
The seasonally adjusted job rate remained stable at 6.1%.
"Economic weakness continues to weigh on the labour market," said labour office head Andrea Nahles.
There were 668,000 job openings in November, 65,000 fewer than a year ago, showing a slowdown in labour demand, the federal labour office said.
"The German labour market remains under pressure, consistent with still-subdued growth in the overall economy," said Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics.
The country is set to be the worst performer among the Group of Seven (G7) rich democracies in 2024 for the second consecutive year.
Due to the subdued economic outlook, the number of unemployed is expected to continue to rise next year, said Martin Mueller, from the economic institute KfW Research.
"In addition, the shortage of skilled workers and weakening labour productivity are dampening growth prospects for the German economy," Mueller said.
Amid economic uncertainty, companies in Germany are becoming more cautious in their personnel planning, the Ifo Institute said on Thursday. The Ifo employment barometer fell to 93.4 points in November from 93.6 points in October.
"Industry is trying to tackle the crisis with a mixture of short-time work and job cuts," said Klaus Wohlrabe, head of surveys at Ifo, as manufacturing companies in particular are increasingly planning to downsize their workforce.
What has so far been a resilient labour market is starting to feel the impact of the economic weakness. Unemployment is seen edging higher this year to 6.0% from 5.7% in 2023, according to the government forecasts.
Leading indicators do not point to any improvement in the coming months either, said Marc Schattenberg, economist at Deutsche Bank Research.
"Job concerns also threaten to weigh more heavily on consumer sentiment," Schattenberg said.
German consumer sentiment is expected to tumble in the last month of the year as households, confronted by reports of job cuts, grow more pessimistic about their income prospects.
Reporting by Maria Martinez, Editing by Friederike Heine, Miranda Murray and Angus MacSwan
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