What's going on?
Germans kicked off the new year with more than just a pounding headache: newly released data showed the country’s employment reached a record high in 2019.
What does this mean?
Fresh data out on Thursday showed Germany added 402,000 jobs in 2019, up 0.9% on the year before. The German government also announced the quality of jobs was improving, with higher pay and benefits becoming de rigueur (or, y’know, the German equivalent). That’s pretty impressive, especially considering a slowdown that saw the economy as a whole grow just 0.5% last year.
But not everyone won out. Only 15% of those jobs were in manufacturing, which perhaps shouldn’t be a surprise given the state of the sector in Germany: it shrank once again in December, marking a full year of contraction.
Why should I care?
For markets: Don’t get carried away.
More workers with higher wages might be good news for consumer goods companies in Germany, since mo’ money could lead to mo’ spending. But the good times aren’t expected to last. Auto companies – the backbone of the German economy – are set to struggle this year, as foreign demand for the country’s cars falls. The German government, then, reckons the country will add just 100,000 jobs in the whole of 2020.
Zooming out: Countdown to Brexit.
Another albatross around the European economy’s neck is Brexit-related uncertainty. According to a new survey by the Bank of England, as many as 42% of UK businesses expect things to remain unresolved until 2021. But the survey also showed they’re less worried about the potential impact than they once were. 17% of participants even thought Brexit could lead to a sales boost – perhaps thanks to the record number of tourists taking advantage of the weaker pound.