German unemployment increased less than economists forecast in December even as Europe’s debt crisis curbed company investment and economic growth.
The number of people out of work rose a seasonally adjusted 3,000 to 2.942 million, the Nuremberg-based Federal Labour Agency said today. Economists predicted an increase of 10,000. The adjusted jobless rate held steady at 6.9%, close to a two-decade low.
Germany’s economy, Europe’s largest, may have contracted markedly in the fourth quarter after the euro area’s succumbed to recession, the Bundesbank said on Dec. 17. Still, business confidence increased for a second month in December after demand from outside the region boosted factory orders and exports.
The Bundesbank predicts the German economy to expand 0.4% this year even as the euro area fights its second recession in four years. The European Central Bank lowered its forecast on Dec. 6 and now predicts an economic contraction of 0.3% in the 17-nation region in 2013.
Some German companies are selling more to faster-growing regions, offsetting weaker demand from the euro area, its largest export market. Shipments to countries outside the European Union increased 9.9% in the third quarter from a year earlier, the Federal Statistics Office said on Dec. 4, with those to the U.S. surging 25.7%.
That’s helping to boost optimism among German manufacturers, according to a report released today by state- owned development bank KfW Group.
In Germany, small and medium-sized companies plan to add employees this year even as most of them expect the economy to stagnate, a poll of more than 3,000 businesses by the BVMW lobby of medium-sized firms showed on Dec. 27.
The economic environment will be more difficult this year than in 2012, German Chancellor Angela Merkel said on Dec. 31. Europe’s sovereign debt crisis is "far from over," though progress has been made and the "reforms that we’ve agreed on are starting to take effect."
