German unemployment rose slightly more than expected in August increasing by +9K versus estimates of +8K rise as Europeâ€™s largest economy showed signs of slowdown due to the regionâ€™s chronic sovereign debt crisis. The number of unemployed rose in August to 2.901 million from an upwardly revised 2.892 million in July. In unadjusted terms, unemployment climbed 29,000 to 2.905 million but the jobless rate was unchanged at 6.8%.
Job vacancies declined by 4K adding to Julyâ€™s decline of 7K suggesting that labor demand may be peaking as employers take a more cautious stance given the uncertainty surrounding the EZ sovereign debt market and the European union. The news confirms the overall slowdown noted in the latest PMI data and shows that growth in Germany is grinding to halt, but nevertheless remains slightly positive.
The data had virtually no impact on EURUSD as the pair remained near the 1.2550 level awaiting the results of the 10 year Italian bond auction. As we noted earlier, the pair appears to be in a state equilibrium at the moment trading bet 1.2500-1.2600 range as traders await further developments from the ECB and fiscal officials in the region.