GERMAN DATA: Mixed Signals In Latest Labour Market Data

Latest German labour market data was mixed - employment continues its stabilization but unemployment ticked up considerably, with the employment agency looking for further layoffs. The IFO employment barometer remains contractionary but is on 10-month highs.

• Unemployment rose noticeably more than expected, by the quickest pace since July 2022 (34k vs 12k cons, 6k Apr) on a seasonally-adjusted basis. The unemployment rate meanwhile remained at 6.3% for the third consecutive month, as expected.
• The expected number of employees impacted by 'Kurzarbeit' (which has to be reported in advance by companies and can be interpreted as an early indicator for future use of state benefits) was little changed in May at around 46k.
• New vacancies reversed their April jump in May, printing at 114k, the lowest since the pandemic. Overall vacancies continue their longer-term downtrend in place since 2022.
• Employment was unchanged in April, meanwhile (lined out in previous bullet).
• Recall the IFO employment index jumped to 95.2 in May, a 10-month high - IFO sees a slower pace of job cuts ahead, especially in industry (manufacturing employment decreased 0.64% Q/Q, worst rate since Q2'20).