IAB labour market barometer: signs on the labour market are becoming less favourable

IAB labour market barometer: signs on the labour market are becoming less favourable

The IAB labor market barometer is based on data from all employment agencies and their forecasts for the next three months. It is therefore considered an early indicator for developments on the labor market. IBA labor market barometer

The clouds over the German labor market are getting darker. The labor market barometer of the Nuremberg Institute for Employment Research (IAB) fell by 0.8 points to 99.8 in May compared to the previous month, thus falling below the neutral threshold of 100 points. “The labor market is currently not a candidate for being the driving force for an economic upturn,” said IAB researcher Enzo Weber. The Federal Employment Agency will present its statistics for May next Tuesday.

“The labor market had largely sat out the economic downturn. However, with the first signs of an upturn, there is now little potential for recovery,” said Weber. Employment continued to rise even during the economic downturn, but productivity fell. The barometer is based on the assessments of all German employment agencies for developments over the next three months.

Two components

The fact that the spring recovery was partly anticipated by the mild winter could also play a role in the subdued labor market prospects. The IAB labor market barometer consists of two components. The component predicting unemployment fell by 1.1 points to 97.2 points and is therefore clearly in negative territory. The employment component also recorded a decline – by 0.5 points to 102.4 points. The employment prospects have thus deteriorated further, but remain positive.

The Munich-based Ifo Institute has produced an employment barometer that shows that companies in Germany are willing to hire slightly more people in May. “However, demand for workers remains rather weak,” said Klaus Wohlrabe, head of the Ifo surveys. “Where there are no orders, companies are also considering cutting jobs.”

Source: Stern

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