Hence there are no signs of a cyclical deterioration on the labor market. However, the labor market has a tendency to lag behind macroeconomic developments. But, thanks to increased labor market flexibility, this time lag is these days nowhere near as pronounced as in previous years. If the recent economic slowdown were very pronounced, its consequences would already be noticeable on the labor market. The outlook for the second half of this year remains positive, with the possibility of moderate growth in the German economy despite the geopolitical uncertainties.
For months now the year-on-year increase in employment has been 0.8%.This corresponds exactly to the real GDP growth rate for the second quarter of this year.Seen in positive terms, this means that economic growth is very labor-intensive, seen from a critical perspective it is indicative of weak productivity growth. The low productivity growth in recent years is indeed one of the weaknesses of the German economy.