German unemployment soared for a third straight month in May, yet the economy is still expected to recover earlier than other euro area nations. The number of people out of work jumped to a seasonally adjusted 21,000 to 2.96 million, compared with estimates of 5,000, while the prior reading of 4,000 was revised up to 6,000. The adjusted jobless rate stood at 6.9 percent, slightly above a two-decade low of 6.8%, according to the Nuremberg-based Federal Labor Agency. The rise in unemployment reflects the negative impact of the sovereign debt crisis and cold weather on the euro area’s biggest economy which grew only 0.1% in the first quarter from 0.7% drop in the last three months of 2012. The Bundesbank said Germany will recover in the current quarter revealing that “economic activity is expected to improve markedly in the second quarter of 2013,” where there will probably be “catch-up effects in response to the weather-related downturn in construction activity during last winter.” Still, Germany may be able to recover faster than other euro area nations that suffer from continued recession and record-high unemployment like Spain which is looking forward to getting a grant for additional two years to cut its budget shortfall to EU limit of 3%.
