Solid economic growth raises German jobs hopes

4th January 2007, Comments 0 comments

5 January 2007, Berlin (dpa) - Germany's economic upswing has given fresh hope to the jobs market in Europe's biggest economy, with data released Wednesday showing unemployment coming in stronger than expected in December. The data, drawn up by the Federal Labour Office, showed unemployment in the market-sensitive seasonally-adjusted terms, edging down to 9.8 per cent last month compared to 10.1 per cent in November. This followed a bigger-than-forecast 108,000 fall to 4,115,000 in December, the data showe

5 January 2007

Berlin (dpa) - Germany's economic upswing has given fresh hope to the jobs market in Europe's biggest economy, with data released Wednesday showing unemployment coming in stronger than expected in December.

The data, drawn up by the Federal Labour Office, showed unemployment in the market-sensitive seasonally-adjusted terms, edging down to 9.8 per cent last month compared to 10.1 per cent in November.

This followed a bigger-than-forecast 108,000 fall to 4,115,000 in December, the data showed, and the number of job vacancies soaring by 50 per cent compared to December last year.

As one of the first key pieces of German economic data to be released in 2007, the unemployment figures are likely to add expectations that the strong economic momentum built up in the country last year will help to propel the nation's economy through the coming 12 months.

Analysts had predicted a 48,000-fall in the numbers out of work with labour office chief Frank-Juergen Weise pointing to Germany's unseasonably mild winter weather as helping to underpin the nation's labour market.

"The labour market during 2006 has profited from the economic pickup," said Weise with the labour office now expecting the numbers out of work this year to be less than in 2006 after "the extraordinary fall" in December.

Echoing Weise's comments, Commerzbank AG economist Matthias Rubisch said: "The positive tendency on the labour market is partly the result of the dynamic economic development and as a result is likely to continue in the coming months."

Underlining the optimistic outlook for Germany, one of the nation's leading economic institutes, the Berlin-based German Institute for Economic Research (DIW) revised up Wednesday its economic growth projections for the year.

Despite a slowing global economy and this month's hefty hike in Germany's value-added tax, the DIW expects the nation's growth rate to come in at 1.7 per cent this year compared to a previous forecast of 1.4 per cent.

Europe's biggest economy should then accelerate to 2.5 per cent next year, the DIW said. Germany emerged from a protracted period of stagnation last year to post what the DIW expects to be a 2.3 per cent growth rate in 2006.

As a result of German industry's growing competitiveness, the nation's economy "has laid a golden foundation stone for robust growth," the DIW said.

Based on the more politically important seasonally unadjusted figures, the numbers out of work in Europe's biggest economy climbed by just 12,000 from November to about 4,008,000 in December.

The rise was greatly lower than is usually the case when winter weather sets in to drive unemployment upwards in Germany.

As a consequence, the unemployment rate in seasonally unadjusted terms remained at 9.6 per cent in December.

In seasonally unadjusted terms, unemployment in December was 597,000 less than in the same month last year. A year ago, the unemployment rate stood at 11.1 per cent.

While the jobless rate also remained at 8.0 per cent in Germany's more economically important western half last month, unemployment in the nation's former communist east edged up to 15.7 per cent in December from 15.5 per cent in November.

However, this was still lower than the 17.3 per cent unemployment rate in the economically hard-pressed east in December last year.

Copyright DPA

Subject: German news

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