Germany’s Labor Market Shows Sign of Losing Steam

http://blogs.wsj.com/eurocrisis/2012/05/31/is-germanys-labor-market-losing-steam/

Germany, which has been keeping the euro zone afloat, is now showing signs of decline on the horizon. Unemployment has begun to rise after falling for several months which is a sign that the troubles created by Greece and Spain are starting to damage the German economy. Manufacturing has also begun to slow down due to a lack of demand in the other parts of the euro zone for which the slack has not been picked up domestically. The troubles in the euro zone are also hurting German consumer confidence. If the German economy were to sputter then the euro zone could be a lost cause.

This relates to the currency exchange we talked about in class as well as to GDP. The value of the euro is already disappearing quickly and German troubles were expedite that process exponentially. In terms of GDP, fewer employed people would decrease consumption and lower international demand would decrease exports which would both contribute to a lower GDP.