German labor market barometer continues recovery in June

The labor market barometer of the German Institute for Employment Research (IAB) rose by 0.8 points to 94.6 points in June compared to the previous month, the IAB announced on Monday.

After the “plunge” in April when the labor market barometer fell to 93.5 points, the lowest value in its history, it was the second rise in a row, according to IAB, the research institute of German Federal Employment Agency (BA).

“The expectations of the employment agencies are slowly brightening up again,” said Enzo Weber, head of the IAB research department.

Although many early indicators for a positive future development could be observed, the development of German labor market had “not yet bottomed out,” the IAB warned.

Both Germany’s unemployment figures and employment figures were “clearly” below the neutral mark of 100 points and a further deterioration in unemployment and employment could be expected in the short term, the IAB noted.

“In view of the worst recession in post-war history, the labor market trend remains comparatively robust, also due to short-time working,” Weber explained. Now, Germany’s labor market had to be brought out of the crisis before bad job opportunities for the unemployed and job starters would lead to “permanent disadvantages.”

The IAB labor market barometer was set up as an early indicator in 2008 and is based on a monthly survey conducted by the BA of all local employment agencies in Germany. The barometer ranges from 90, marking a very negative outlook, to 110 for a very positive outlook.