German unemployment falls to 7% in May: statistics

31st May 2011, Comments 0 comments

German unemployment fell to seven percent of the workforce in May, official data showed Tuesday as the country continued to reap the benefits of labour market reforms and a global recovery.

The Federal Labour Agency said the unadjusted number of unemployed had fallen in Europe's biggest economy below three million, with a drop of 118,000 bringing the politically symbolic figure to 2,960,000.

When adjusted for seasonal and calendar effects the decline was a much more modest 8,000 however, compared with an average analyst forecast decline of 30,000 compiled by Dow Jones Newswires.

In April, the adjusted jobless rate stood at 7.1 percent in Germany, and 7.3 percent on a non-adjusted basis, but in May, both calculations came up with the same figure of 7.0 percent.

Earlier in the day, the national statistics office said retail sales had gained 0.6 percent in April, following a revised slump of 2.7 percent in March.

The German data "again illustrated the German economy's main dilemma: while the labour market remains the showcase of the recovery, private consumption is only slowly getting off the ground," ING senior economist Carsten Brzeski said.

German manufacturers have well-stocked order books and are investing more, and the demand for labour should remain strong, analysts say.

Yet "looking ahead, it is obvious that German consumers will not engage in a spending spree," Brzeski said, though he also noted that "the fundamentals for decent consumption boom in Germany have hardly been better since reunification" in late 1990.

© 2011 AFP

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