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German labour market unfazed by economic weakness
[FRANKFURT] The German labour market continued to shine in November, shrugging off the current economic weakness, with unemployment now at its lowest level since unification, official data showed on Thursday.
The number of people registered as unemployed in Europe's biggest economy fell by a seasonally-adjusted 14,000 in November to 2.872 million, the Federal Labour Office said.
That is the lowest number since December 1991, although the jobless total came close to these levels in early 2012.
The unemployment rate - which measures the jobless total against the working population as a whole - stood at 6.6 per cent in seasonally adjusted terms, the office calculated.
That is unchanged since October, but the jobless rate has never been lower since unification.
In raw or unadjusted terms, the trend was also downwards, with the jobless total falling by 15,900 to 2.717 million and the jobless rate steady at 6.3 per cent.
"The labour market continued to develop favourably, independent of the economy," the labour office said.
"The trend in employment remains pointed upwards." The German economy, Europe's powerhouse, has lost some of its shine in recent months as uncertainty resulting from geopolitical crises such as Ukraine undermined the outlook for recovery.
Nevertheless, as that uncertainty has begun to fade, sentiment indicators are tentatively pointing up again. And Germany averted a new recession when gross domestic product (GDP) expanded by a modest 0.1 per cent in the third quarter.
Private and government consumption is currently keeping the German economic engine ticking over, while falling investment is preventing a more broad-based recovery, the latest GDP data showed.
"A sustained rebound is not yet in sight," the labour office said.
Nevertheless, analysts were positively surprised by the ongoing resilience of the labour market in the face of such torpor.
They had been pencilling in a much shallower drop in the jobless total this month of just 1,000.
"Germany's job market remains unaffected by the current economic rough patch." said Berenberg Bank economist Christian Schulz.
"It's good news all around. Germany's buoyant labour market continues to underpin wage growth and thus private consumption, in combination with very low inflation," the expert said.
"As business uncertainty fades in the absence of significant further bad news, Germany's fundamentally strong position should come through again and help boost investment, allowing the economy to reach trend growth rates from the second quarter of 2015 onwards," Schulz predicted.
BayernLB economist Stefan Kipar agreed.
"Ooverall, the labour market is continuing to develop at a high level. We see factors which could break this in the winter months." IHS Global Insight economist Timo Klein said that "overall, labour market conditions remain much healthier in Germany than in most other countries in Europe." This ongoing improvement in underlying labour market conditions was "noteworthy against the background of broadly stagnating GDP in the two middle quarters of 2014," Klein said.
"Overall, underlying German economic growth will remain solid despite the uncertainty stemming from current geopolitical crises in the Ukraine and in Iraq/Syria, given that sharply lower oil prices and a softer euro since mid-2014 are providing significant support now," he concluded.
"Even though the days are getting shorter, the situation on the labour market remains positive. That is an important signal in the current economic environment," said German labour minister Andrea Nahles.