German official unemployment rate falls to 7.7 pct in May

1st June 2010, Comments 0 comments

German unemployment fell sharply in May, data from the national labour agency showed on Tuesday, as Europe's biggest economy advanced despite the eurozone financial crisis.

The unemployment rate fell to 7.7 percent of the workforce, the lowest level since December 2008, from 8.1 percent in April,

This was also the lowest May reading since 1992 and the 11th monthly decline in a row.

The number of jobseekers declined by 165,000 after harsh winter weather finally eased, bringing the total to 3,242,000, the agency said.

"The current trend of important labour market indicators shows a renewed improvement," said the head of the labour agency, Frank-Juergen Weise.

When adjusted for seasonal factors, the number of jobless fell by 45,000 nearly three times more than a forecast of 17,500 compiled by Dow Jones Newswires.

Analysts had also predicted the unemployment rate would remain steady.

The labour agency said the latest data allowed it to "conclude that the labour market's improvement comes from the economic environment," or the rebound from Germany's worst recession since World War II.

In addition, "successful labour market reforms, the government's famous crisis tool of short-work schemes and companies' prudence have made the labour market the bright spot of the recession," ING senior economist Carsten Brzeski noted.

"May's fall in German unemployment confirms that the eurozone's largest economy is faring relatively well despite the periphery's troubles," Capital Economics senior European economist Jennifer McKeown added.

Germany has withstood so far the financial crisis centered on countries like Greece, Portugal and Spain.

© 2010 AFP

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