German jobless rate near pandemic peaks is cause to worry
Oct 30 (Reuters) -Germany's unemployment rate, which rose to 6.1% this month, is approaching the 6.4% peak of the pandemic and this is cause to worry.
This time, the jobless rate is rising under normal conditions without the influence of the drastic measures that resulted from lockdowns intended to contain the spread of COVID-19.
That means the current rise will be harder to stop. Not only is there less chance of a huge spending programme to support the economy, the possibility Donald Trump will be elected U.S. president in elections next week raises the risk of a trade war with the United States.
Germany is the engine room of the eurozone economy and the state of its manufacturing sector is a worry too. PMI has collapsed and remains extremely weak - indicative of enduring recession. The automobile sector, which is at the heart of the problems, is also the target for potential tariffs that are surely more likely should it receive government support.
Without the support of Germany's economy, the eurozone is likely to suffer and should the jobless rate top 2020's peak - which is looking increasingly likely - it may trigger risk aversion that weighs on the euro and supports the dollar, the world's reserve currency.
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German unemployment https://tmsnrt.rs/48tDZ4y
(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)
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