31 Jul 2009

Germany continues to shed jobs

11:48 am on 31 July 2009

Europe's biggest economy, Germany, is continuing to shed jobs and economists warn things are going to get much worse.

There are now nearly 3.5 million people without a job in Germany, after another 52,000 joined the jobless queue in July, taking the national jobless rate up slightly to 8.2%.

In Britain, the jobless rate is expected to head to 10%, but in the United States there are signs of stability as fewer people seek unemployment benefits.

Jerry Wattenberg, managing director of the economic consulting firm JTW International, says employment is a lagging indicator, and continues to decline even if the economy is improving, which affects confidence.

Mr Wattenberg says a recovery is going to depend on consumers.

Recovery not certain - IMF

The International Monetary Fund says Europe's economic recovery is far from certain.

It is pushing for more spending on stimulus packages, as well as warning that any recovery depends on the health of the banks.

It sees the Eurozone economy contracting 4.8% this year, followed by a 0.3% contraction next year.

International Monetary Fund director Marek Balka says more can be done to improve retail banks' situation.