German employment data hit a new high after the reunification of the two Germanys, showing heavy pressure on the European Central Bank to raise interest rates
January 3 Financial Associated Press News (Edited by Shi Zhengcheng)According to data released on Monday (January 2) by the German Federal Statistical Office, the country’s employment data in 2022 will continue to climb and set a new high following Germany’s reunification in 1990. Since this scene of “higher inflation labor market tensions” was staged in the United States, further deepened the European Central Bank’s concerns about more aggressive interest rate hikes.
(German employment data hit a new high since 1990, source: Destatis) Germany’s statistics department said:In 2022, the number of employed people in Germany will reach 45.6 million, an increase of 589,000 from the previous year, or 292,000 more than the previous extreme value of 2019. At the same time, the unemployment rate in Germany will also it fell to 2.8%, which is also an all-time low.Of course, this figure in itself is not surprising: according to the latest available data, even the unemployment rate of 6.5% in the eurozone in October last year marked a new low since the statistics were available.
(Eurozone unemployment rate, source: EuroStat) The S&P Global Germany PMI released on Monday also showed that although the output of German manufacturing firms fell in December, they continued to steadily absorb employment. the hot job market is vivid on paper. Of course, similar to the US, a tight job market means higher wages for workers and a more unpredictable inflation environment.
ING economist Bert Colijn told the media he predictedThe eurozone job market will remain tight even against the backdrop of a recession, with companies looking to keep employees on hand to ensure they are available after the recession ends, so there will be “moderate upward pressure” on wages.
According to the investigation report released by the EU in December last year,Two-fifths of German companies reported labor shortages in the fourth quarter of last year and the record for this figure was in the third quarter of last year. Across the euro area as a whole, the percentage of companies that declare they cannot hire staff reaches 30%.
Given that the inflation rate in Europe was still at 10.1% in November last year, it was only slightly lower than the previous month’s all-time high. Therefore, the market generally expects the European Central Bank to continue raising interest rates by 50 basis points at its February 2 policy meeting, taking the key deposit rate to 2.5%.
At last month’s European Central Bank meeting, President Lagarde underlined that the upward trend in wages across the euro area was still strengthening, with a strong labor market and offsetting wage increases triggered by high inflation becoming the main driving factors.
Lagarde also added that the ECB expects wage growth to continue to be above the historical average, causing inflation to fall back to the inflation target (2%) until at least 2025.
This Friday (6 January) Eurostat will release inflation data for December of last year. According to the current survey of economists,While more eye-catching CPI data is likely to retreat into single digits, core inflation data, which reflects underlying price pressures, will remain at a record high of 5%.
