The most important events and reports on the economy, central banks and politics from the Dow Jones Newswires program
IAB labor market barometer at its lowest level since 2020
The IAB labor market barometer fell by 0.6 points in August compared to the previous month. The leading indicator of the Institute for Labor Market and Occupational Research (IAB) is now at 100.5 points, just above the neutral mark of 100 and at its lowest level since 2020. The European Labor Market Barometer fell below the mark for the first time this year out of 100 and stands at 99.7 points in August. “The economic downturn has taken hold in Germany – it is now also leaving its mark on the labor market,” explained Enzo Weber, head of the IAB research department.
KfW: German real wages point to a recovery in consumption
German wages grew by 6.6 percent in the second quarter, the strongest in 20 years. KfW Chief Economist Fritzi Köhler-Geib sees her assessment confirmed that private consumption will support a moderate economic recovery. “The gap between inflation and nominal wage growth is narrowing. Real wage increases are expected to increase more significantly towards the end of the year,” she writes in a comment.
IfW: Growth in real income for 2023 not yet identified
The Kiel Institute for the World Economy (IfW) expects that general inflation will continue to ease over the course of this year and that nominal wages will continue to rise sharply. However, it is still unclear whether real wages will already rise on average in 2023 or only in 2024. The increase in real wages recorded in the second quarter by 0.1 percent compared to the same quarter of the previous year is still minimal. “The fact that purchasing power has not fallen further is due both to the accelerated increase in nominal wages and to declining consumer price inflation,” said IfW economist Dominik Groll.
China’s state banks consider further deposit rate cuts – agency
China’s largest state-owned banks, including the Industrial & Commercial Bank of China and China Construction Bank, are considering cutting their deposit rates for the third time this year, according to a report by Bloomberg news agency. The aim is to boost the economy and secure your own margins, according to the report, which is based on information provided by insiders. Rate cuts of 5 to 20 basis points are possible, writes Bloomberg. The plans have yet to be approved by regulators and could be announced on Friday at the earliest.
DIHK: Energy problems burden production in Germany
According to the association, the energy transition barometer of the German Chamber of Industry and Commerce (DIHK) has fallen to its worst value since it started in 2012. “The confidence of the German economy in the energy policy is currently at a low point,” said the deputy director of the DIHK, Achim Dercks. “The worries about one’s own competitiveness have never been greater.” According to the DIHK, the barometer is based on the assessments of companies from across the German economy. The current survey is based on the responses from a total of 3,572 companies.
Bär: “Children’s basic security show” of the traffic light is a farce
For the deputy leader of the Union parliamentary group Dorothee Bär (CSU), the agreement on basic child security is “another hollow formula compromise of the traffic light”. After months of dispute, the cornerstones are still based on unclear figures, do not take into account the criticism that has already been voiced, in particular by the municipalities, and the SPD parliamentary group leader makes it clear that Parliament also has ideas. What the federal government is selling as a major social reform is actually “an attempt at administrative reform that has failed at all.”
Wissing rejects higher federal cost sharing for the Deutschlandticket
Federal Transport Minister Volker Wissing (FDP) has rejected a higher federal cost sharing for the Deutschlandticket and has called on the federal states to save. “The federal government has spent a lot of money on the Germany ticket and we have also increased the regionalization funds,” Wissing told the editorial network Germany. He demanded that the federal states first have to save on the transport associations and distribution costs. “I recommend the federal states to move forward courageously and to effectively reorganize the patchwork of transport associations,” said Wissing.
Minimum wage for care workers is to rise by up to 14 percent
Nursing staff in Germany who are employed at the minimum wage level are to receive significantly more money from next year. The minimum wage for nursing care is to increase by up to 14 percent by February 1, 2024: The nursing commission unanimously agreed on a recommendation to this effect, as announced by the Federal Ministries of Health and Labor in Berlin. The minimum wages for employees in geriatric care will then rise to between EUR 16.10 and EUR 20.50, depending on the level of qualification of the employees.
All-metal president against industrial electricity price for large companies
The president of the employers’ association Gesamtmetall, Stefan Wolf, has spoken out against an industrial electricity price only for large companies. “Germany and the German economy thrives on medium-sized companies, family businesses, the many small and medium-sized companies. This industrial electricity price will not reach them. But they are suffering massively from these high energy prices,” Wolf told the Phoenix news channel. Instead, he called for a reduction or complete abolition of the electricity tax, which would reach all companies. “That has to be the goal,” said Wolf. Energy costs are also a cost item for less energy-intensive companies.
BDEW: Germany has an oversupply of charging options for e-cars
Germany has an oversupply of public charging options and low utilization, as can be seen from the electromobility monitor of the Federal Association of Energy and Water Industries (BDEW) for the first half of 2023. The association appealed to the federal government to present a strategy to achieve its goal of 15 million electric cars. According to the BDEW, the average occupancy of the public charging points was only 11.6 percent. Even during the day – between 9 a.m. and 8 p.m. – the average occupancy never exceeded 20 percent.
Credit insurers: Construction bankruptcies could increase by 15 to 20 percent
According to calculations by the credit insurer Atradius, bankruptcies in the construction industry could increase by between 15 and 20 percent this year. “The construction industry will still need staying power,” said Germany Director Frank Liebold. The German construction industry is on shaky ground. The high interest rates and the significant increase in construction prices slowed down the construction of new residential and commercial properties. Project cancellations increased. “There is no sign of the situation easing in the short term,” stressed Liebold.
Study: Families pay up to 40 percent of their income for rent including heating
According to a study by the real estate portal Immowelt, rent including heating accounts for up to 40 percent of families’ median net income. The analysis compares the current asking rents for a 100 square meter apartment in 107 selected German cities with the median income of a family of three, each with one full and one part earner. In 70 of the 107 cities surveyed, tenants for a family-friendly apartment have to spend at least 30 percent of their net income on rent including heating. In general, it is often recommended to use a maximum of 30 percent of net income for housing costs.
In the leaflet affair, Söder is initially sticking with Aiwanger as minister
In the affair about an anti-Semitic leaflet, Bavaria’s Prime Minister Markus Söder (CSU) is initially sticking to Economics Minister Hubert Aiwanger (free voters). However, there are still many open questions that Aiwanger would have to finally clarify, said Söder after a meeting of the coalition committee in Munich. Therefore, the Deputy Prime Minister should now answer 25 questions in writing, to which Aiwanger had agreed. The criticized anti-Semitic leaflet called Söder “disgusting” and “disgusting”. He spoke of “the worst Nazi jargon”.
DJG/DJN/AFP/apo
(END) Dow Jones Newswires
August 29, 2023 07:30 ET (11:30 GMT)