German unemployment rate falls to 13-year low
30 October 2007, Berlin (dpa) - The number of people out of work in Germany fell more than forecast in October with data released Tuesday showing the labour market in Europe's biggest economy at its strong point since the nation's historic unification 17 years ago
30 October 2007
Berlin (dpa) - The number of people out of work in Germany fell more than forecast in October with data released Tuesday showing the labour market in Europe's biggest economy at its strong point since the nation's historic unification 17 years ago
The Federal Labour Agency in Nuremberg said seasonally adjusted unemployment fell by 40,000 to 3.657 million or 8.7 per cent. The jobless rate sank to its lowest mark since the economic boom of the early 1990s fuelled by the breaching of the Berlin Wall.
At the same time, employment hit its highest level since German unification in 1990, climbing to over 40 million, data for September showed.
"The employment outlook for the rest of the year remains favourable," said Eckart Tuchtfeld, economist with Commerzbank AG.
Economists had predicted a fall of 30,000 in the numbers without jobs in October after unemployment dropped by 50,000 to 8.8 per cent in September.
But the labour market could come under pressure next year with economists predicting that the economy will slow as a strong euro hits Germany's exports and high oil prices and the credit crunch triggered by the US housing crisis undercuts global economic growth.
German Chancellor Angela Merkel's conservative-led government last week lowered its 2008 growth forecast to two per cent and as a result brought it more into line with private economists' forecasts.
The economy is projected to expanded by about 2.6 per cent in 2007 after it emerged last year from a protracted period of stagnation to post a perky 2.9 per cent growth rate.
However, combined with higher wage settlements, the ongoing improvement in Germany's labour market will help to shore up consumer confidence in the country, analysts say.
Based on the more politically sensitive seasonally unadjusted data, October unemployment fell by 110,000 to 3.434 million. This took unadjusted unemployment to its lowest level in 13 years.
"The positive development in the unemployment figures is attributed to the pick up in the economy," the labour agency.
Amid a renewed debate about economic reform in Germany, Labour Minister Franz Muentefering seized on the figures as a sign that the nation has succeeded in its task of tackling high unemployment.
"The figures are encouraging and show that it is possible to combat unemployment," said Muenterfering. "We have to continue on this course."
There are now 650,000 fewer unemployed that a year ago in seasonally adjusted terms. Some 8.2 per cent of the working population were out of work on this basis, down from 9.8 per cent a year earlier.
Seasonally adjusted unemployment fell by 162,000 in September to 3.54 million, its lowest point in 12 years.
Tuesday's figures also underscore the labour shortages facing Germany, in particular in the IT and engineering industries with the number of job vacancies standing at 608,546 in October. This represented a fall of 2.8 per cent compared to the same month in 2006.
Nevertheless, industry leaders have been warning that the problems they face in filling key jobs could undercut Germany's economic performance.
Subject: German news