German unemployment rate falls
German unemployment fell in September to a level last seen more than
15 years ago, official data showed on Tuesday, though analysts expected
it to begin rising again next year.
The benchmark unemployment rate in Europe's biggest economy declined
to 7.4 percent from 7.6 percent in August, according to figures
published by the national labour agency, even as business activity
diminished rapidly.
At the end of the month, the biggest European economy counted a total
of 3.081 million unemployed workers, the agency said.
When adjusted for seasonal factors, the number of unemployed people
decreased by 29,000 following a drop of 39,000 in August, the labour
agency said.
The pace in September was roughly in line with the average of 28,000
over the past six months. But because the German economy is slowing
sharply, the steady improvement in unemployment was thought to be
nearing an end.
Economy Minister Michael Glos warned the government would have to
"markedly revise downward" its growth forecast for 2009 owing to the
world financial crisis.
The 2009 estimate is currently at 1.2 percent, but Glos did not say
what the new forecast would be.
Commenting Tuesday on the unemployment data, Commerzbank analyst
Eckart Tuchtfeld said: "It can only be a matter of time before it too is
hit by the economic slowdown."
The September unemployment rate typically declines as companies take
on new workers or rehire those who were laid off during the summer
holidays.
The data showed "that Germany is one of the few eurozone economies
where labour market conditions are still improving," Capital Economics
economist Jennifer McKeown noted.
"This is a rare piece of good news for German consumers, although
admittedly survey measures of hiring intentions point to a slowdown in
employment growth to come," McKeown added.
Despite falling unemployment levels and rising wages, consumers have
seen their purchasing power eroded by inflation that was fueled by
higher costs for energy and food.
Consumption has been affected as a result and has failed to provide
significant support to the German economy. UniCredit Markets economist
Alexander Koch noted that the adjusted number of unemployed workers
marked the 40th decline in the past 42 months, and the lowest level
since January 1993.
AFP |