GERMAN DATA: Labour Market Deterioration Accelerated In Q3

The German labour market deterioration accelerated in Q3, as employment declined by 41k on the quarter (-0.09% Q/Q), vs -11k (-0.02%) in Q2. Industrial, information & communication and corporate service provider sectors all declined at their sharpest rates since the pandemic. 

• The industrial sector saw its saw its ninth consecutive quarter of declining employment, at -0.47% Q/Q after -0.34% in Q2 for the weakest rate since the pandemic.
• Employment in the services sector continued to increase but at the slowest pace since Q1 2021 (0.03% Q/Q vs 0.11% Q2). As in previous quarters, the main upside driver was the "public service providers, education, health" cluster rising by 0.43% (an acceleration from Q2's 0.39% and the quickest pace since Q3 2024).
• Other services subsectors were mixed, with declines in information and communication at -0.19% and for corporate service providers at -0.32% (both these sectors seeing their lowest rates since the pandemic). Employment in finance and insurance meanwhile ticked up, at 0.18%, while real estate and housing services employment was broadly unchanged.
• The data adds some context to the 0.0% Q/Q Q3 GDP print after -0.3% in Q2, implying higher productivity last quarter on a per person basis. However, average hours worked per person in employment outweighed that, coming in at 333.7 (vs 333.1 Q2, +0.18%), implying declining productivity on an hourly comparison.
• The number of self-employed persons declined in Q3, continuing its long-term downtrend, at -0.14% Q/Q.
• From a long-term structural perspective, the composition of the German labour market continues to shift, with the public/health/education cluster gaining greater prevalence in employment (see bottom chart).
• Note that this builds on the headline Q3 figures being released on Tuesday, with the details noted here only updated overnight.