German economy avoids recession, labour market resilient

30th Apr 2024 10:32

(Sharecast News) - The German economy avoided recession in the first quarter of the year, with modest 0.2% growth reported on Tuesday, surpassing analysts' expectations.

That was primarily driven by the construction sector and robust exports, according to the preliminary data from Destatis, the federal statistics office.

Revisions to the data for the final quarter of last year revealed a 0.5% contraction, a steeper decline than previously reported, however.

Throughout 2023, Europe's largest economy struggled amidst challenges such as high energy costs, subdued global demand, and elevated interest rates.

Recent indicators suggested a potential turnaround in consumption, with German retail sales surging by 1.8% in March, exceeding expectations and signalling a possible recovery in household spending.

However, the first-quarter data indicates a decline in household consumption overall, albeit without specific details provided by the statistics office.

Despite the sluggish economic growth, the labour market showed resilience, with only marginal increases in unemployment.

Destatis separate reported on a rise of 10,000 unemployed people in seasonally adjusted terms on Tuesday, slightly higher than analysts' forecasts. However, the jobless rate held steady at 5.9%.

Job openings in April totaled 701,000, indicating a decrease of 72,000 compared to the previous year, signalling a slowdown in labour demand amidst the economic uncertainty.

Reporting by Josh White for Sharecast.com.