Sentiment among German companies weakened further in October. The ifo business climate index fell to 102.8 points from 103.7 points in September. Companies were less satisfied with their current business situation and less optimistic about the months ahead. Without doubt, the trade dispute with the U.S. is increasingly weighing on the German economy. While the business climate deteriorated in manufacturing, trade and services, the respective index for the construction sector hit another record high. Labor market trends remained clearly positive in October. Compared to the previous month, the number of unemployed fell by 12 000 in seasonally-adjusted terms. Employment continues to grow strongly. In September, the number of people employed was up by +1.3% on the previous year. The rise in employment continues to be solely due to the increase in jobs liable to social insurance. It recorded an increase of +2.2% in August. On the back of a somewhat clouded growth outlook for the German economy, we expect the positive labor market trend to continue, albeit at a slower pace.
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Weekly Export Risk Outlook 31 October 2018