The monthly economic release covering Germany's employment figures is called the German ILO. ILO is an acronym for the International Labor Organization, a specialized agency of the United Nations that has sought, since its founding and adoption by the Treaty of Versailles in 1919, to promote social justice, human rights and decent working conditions. The world adopted the ILO as a specialized agency of the League of Nations to keep peace and avoid social unrest in the workplace. Since 1919, and through many years of conventions and treaties adopted by European States, all states subscribe to the standards of the ILO, which cover categories such as collective bargaining, child labor, forced labor and other workplace issues.
Why the German ILO reports in particular are so vital to economists, policymakers and traders is because Germany is the European leader in manufacturing and industry and was in some periods in history, leading the world. Germany sets the standard and tone regarding the business climate of all of Europe. Spain, France and Italy vie for the No.2 spot. So, the world watches German governmental policies as a gauge to future business climates in Europe.
Many will analyze German numbers to determine whether unemployment hit a bottom, or analyze the numbers based on a four-week moving average to determine trends and gauge future releases. This is because employment is a lagging indicator and is vital in determining the strength of an entire economy. Japan and the United States are just two nations of many that are major trading partners. If Germany's sneezes, the rest of the world is at risk of catching a cold. (For more read our Economic Indicators Tutorial.)
Germany's Employment Statistics
Currently, the Federal Statistics Office, an agency within the Federal Interior Ministry in Germany, compiles, analyzes and releases monthly employment information that covers three categories: the economically active population, persons employed and the unemployed. This information is compared in a clear table to unemployment rates in other European States, Japan and the United States. With a current population of 82 million, Germany reported an employed workforce of 40.01 million in August 2009, a decrease of 216,000, or .05 percent, from the previous year. Overall, the unemployment rate in Germany decreased at a steady rate between 2006 and 2009. (From unemployment and inflation to government policy, about macroeconomic measures and how they affect economies in Macroeconomic Analysis.)
Germany tracks its industries by a Production Index that covers six categories: total production industries, production industries excluding building services, mining and quarrying, manufacturing, energy supply and site preparation, and civil engineering.
Many statistics can be found using these numbers. For example, as of 2009, 4.5 million persons were employed through public services or government, but that number is decreasing as Germany continues its privatization of basic government services such as waste management.
For the monthly employment release, the Federal Statistics Office tracks those who are registered as unemployed, registered job offers, the apprenticeship market, employment integration, marginal work, persons employed subject to social insurance and recipients of benefits. (Find out how to work the system to get the highest total benefits the law allows. See 4 Unusual Ways To Boost Social Security Benefits.)
Until 2007, the Federal Statistics Office counted the number of persons in employment and employment divided by a population ratio; underemployment and unemployment rates were published on a monthly basis as part of the ILO economic release. The unemployment rates were broken down by sex and age for East and West Germany. Now, the Federal Statistics Office tracks seasonally adjusted unemployment figures and rates and breaks them all down by age and sex.
The effects for traders regarding the health of the euro in monthly ILO reports is of vital importance. For example, when the September 2009 reports were released and showed a rise in the unemployment rate to 8.3 and a loss of 20,000 more monthly jobs, the euro dropped against the United States, EUR/USD 87 points in seconds. In on small measure, the health of the euro rests on a healthy German economy.