German jobless rate falls sharply in April

29th April 2010, Comments 0 comments

German unemployment dropped sharply in April to 8.1 percent of the workforce, the Federal Labour Agency said Thursday, from 8.5 percent in March, in another sign of recovery in Europe's biggest economy.

"There was an unexpectedly strong springtime upturn on the labour market in April. The current trend is encouraging," said the agency's head, Frank-Juergen Weise.

The seasonally-adjusted rate fell for the fifth straight month and posted its sharpest drop since early 2008 to 7.8 percent, Capital Economics senior European economist Jennifer McKeown noted.

ING senior economist Carsten Brzeski commented that "the harsh winter, the Greek crisis, they have all left the German labour market unperturbed."

He put the improvement down to "active labour market policies," including the government's short work programme that lets companies cut workers' hours, a scheme that is to be extended until March 2012.

Trouble spots nonetheless remained in formerly communist areas of eastern Germany, and the highest unemployment, at 14.2 percent, was recorded in Berlin.

In the northeastern state of Mecklenburg-Western Pomerania, unemployment was also strong at 13.4 percent, though it had fallen from 14.6 percent in March 2009.

Around 3.4 million people were looking for work in all, or 162,000 fewer than in the previous month, the labour agency said.

On a seasonally-adjusted basis, the number declined by 68,000 to its lowest rate since December 2008.

The figures came two days after the GfK research group said that German consumer confidence had risen more than expected.

"Signs that the German economy is recovering are getting stronger. And consumers are taking them increasingly seriously, as their improved optimism shows," GfK said in a statement.

But while greater labour market flexibility has helped keep unemployment from soaring, it has also caused disposable incomes to decline, which has kept private consumption subdued.

© 2010 AFP

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