Jobless fall doesn't lessen Merkel's woes

2nd November 2006, Comments 0 comments

2 November 2006, Berlin (dpa) - German unemployment chalked up a bigger-than-forecast fall of 67,000 in October, the federal labour office said Thursday, adding to signs that Europe's biggest economy remains on a growth course.

2 November 2006

Berlin (dpa) - German unemployment chalked up a bigger-than-forecast fall of 67,000 in October, the federal labour office said Thursday, adding to signs that Europe's biggest economy remains on a growth course.

This resulted in the seasonally adjusted unemployment rate, which analysts see as reflecting labour market trends, falling to 10.4 percent last month from 10.6 per cent in September.

Analysts had forecast a fall of about 20,000 in seasonally adjusted unemployment last month. The numbers out of work have dropped by a monthly average of 49,000 between June and August, the labour office said.

'The improving economy has given a boost to the labour market', said labour office chief Frank-Juergen Weise, who predicted a further fall in 2007. 'Unemployment has again fallen strongly,' he said

The release of the latest jobless data comes in the wake of key economic sentiment surveys showing a pickup in both consumer and business confidence.

However, Chancellor Angela Merkel's ruling coalition has far been unable to reap any political benefits from both the improvement in the labour market and the nation's solid growth performance with opinion polls showing falling support for her government.

Indeed, the drop in unemployment and economic upswing have failed to help cancel out the electoral fall out for the Merkel-led government following its deeply unpopular plans for both health reform and a hike in sales tax.

A poll released earlier this week showed backing for Merkel's conservative political bloc, which 12 months ago forged a grand coalition government with the Social Democrats, has fallen to a record low of 28 percent.

Thursday's data showed the numbers out of work in the politically sensitive seasonally unadjusted terms dropping 153,000 to 4.085 million last month.

This was 471,000 less than the same last year, the labour office said, and the lowest level since November 2002.

As a result, the nation's unemployment rate in the politically sensitive seasonally unadjusted unemployment rate slipped by 0.3 per cent to 9.8 per cent last month.

The fall meant that the German jobless rate has fallen below 10 percent for the first time in almost four years.

While unemployment stood at 8.2 per cent in Germany's key western half in October, in the more economically hard-pressed former communist east the jobless rate came in at 15.7 per cent.

DPA

Subject: German news

0 Comments To This Article