-Natixis economist Paul Beaumont
The number of unemployed people in Europe's largest economy increased more than four times as much as economists estimated this month, as long winter and further deterioration in the neighbouring Eurozone countries took their toll on German economy. According to the data published by the Nuremberg-based Federal Labor Agency, there were 21,000 more unemployed people in May, than a month ago, pushing total number of people out of work to 2.96 million. The figure was unexpected, as analysts predicted that there would be only 4,000 more jobless people. Despite the increase the jobless rate remained unchanged at 6.9%. Harsh weather, a relatively high number of public holidays are both being blamed for the increase.
In a separate report the German Federal Statistics Bureau said that consumer prices picked up last month, boosting monthly inflation rate up to 0.5%, compared with a 0.5% deflation a month earlier. On a yearly basis consumer price index rose 1.5% in May, up from 1.1% in the preceding month and well above analysts' expectations of 1.3%. Latest data is adding to signs that German companies are still cutting costs and jobs, while consumers are still showing willingness to their spending. Meantime, there are signs that the recent setback was only temporary and that stabilization took place in the first quarter of this year.
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