German Employment Bump

Germany’s Federal Labor Agency reported that unemployment in the country improved very slightly in January. Those unemployed dropped a mere 16,000 to a seasonally adjusted 2.92 million. Bloomberg reported:

German unemployment unexpectedly declined in January, adding to signs that Europe’s largest economy is gathering pace.

But, according to DJ Newswire:

Germany’s resilient labor market took another hit at the start of the year, as unemployment rose above 3 million people for the first time since March 2012, data from the BA federal labor agency showed Thursday, but BA said the increase was due to seasonal effects.

January’s increase in unemployment to 3.138 million people — the highest level since March 2011 — comes as Germany’s statistics office Thursday reported a sharp drop in retail sales in December, underpinning the weakness in the euro-zone’s largest economy.

All in all, even if the interpretation is that Germany has started a labor recovery, 16,000 people hardly makes a trend, or even a positive one. Until Germany can create closer to 100,000 jobs per month, on a steady basis, analysts have the right to be skeptical about a turnaround.

American Airlines Takeover

A number of press reports say that U.S. Airways Group Inc. (NYSE: LCC) will take over the airline operations of bankrupt AMR. The marriage of U.S. Airways and American Airlines would create one of the largest carriers in the world. But travelers and consumer advocates have reason to worry about the effect of the deal. The merger of Delta Air Lines Inc. (NYSE: DAL) and Northwest Airlines, as well as the marriage between Continental Airlines and United Airlines to form United Continental Holdings Inc. (NYSE: UAL), have produced large numbers of complaints about ground service and reservation systems. As has been true with most airline mergers, these problems will take years to sort out. The media’s focus on the merger has not concentrated on the future of the two airlines. Rather, the headlines have been dominated by whether AMR CEO Thomas Horton or U.S. Airways CEO Doug Parker will run the corporation once it is formed.

Dreamliner Hits Keep Coming

Japanese airline All Nippon Airways, which has been affected as much as any other carrier by the grounding of the Boeing Co. (NYSE: BA) 787 Dreamliner, apparently has started to keep a tab on how much the grounding has hurt its sales. Other airlines hurt by the mechanical problems of the Dreamliner likely will start to add up damages as well. Aside from lost sales as airlines halt delivery of the 787 because of the debacle, Boeing will face a series of demands for reparations. Reuters reports:

ANA, valued at close to $7 billion, said it had not yet decided whether to claim compensation from Boeing, and it had no plans, for now, to change a growth strategy that has the technologically advanced 787 at its core. But it conceded that a prolonged grounding of the plane would impact that strategy, and will delay issuing its mid-term business plan for several weeks.

“We have not decided on our right to demand damages, but naturally going ahead, if a damage amount is decided for the incident, we will negotiate,” Chief Financial Officer Kiyoshi Tonomoto said at a briefing on ANA’s quarterly results.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.