Slight weakening in German labor market likely continued in August

The number of unemployed in Germany in August is expected to have increased by 5,000, following a rise of 9,000 in June. The unemployment rate is expected to remain stable at 6.4%, said Societe Generale in a research note. 

While employment sentiment indicators have rebounded in August and the number of vacancies continues to rise, employment growth has steadily declined in recent months. This should also result in a small and temporary increase in the number of unemployed. With more positive signals from the manufacturing sector, the labor market should gradually improve, argues SocGen. Risks are however on the rise, stemming from the apparent slowdown in the Chinese economy.