German unemployment falls as nation braces for general elections

[FRANKFURT] German unemployment extended its decline in August, underpinning a robust upswing in Europe's largest economy less then four weeks before general elections.

The number of people out of work fell by a seasonally adjusted 5,000 to 2.532 million, data from the Federal Labor Agency in Nuremberg showed on Thursday.

The median estimate in a Bloomberg survey was for a drop of 6,000.

The jobless rate remained at 5.7 per cent, the lowest level since the country's reunification.

"The labour market continues to develop favourably," labour agency head Detlef Scheele said in a statement.

"Strong employment growth continues and demand from companies for new employees continues to be high."

Chancellor Angela Merkel's record of falling unemployment, stable growth and a balanced budget has helped her maintain a double-digit lead over Social Democratic challenger Martin Schulz as she bids for a fourth term in Sept 24 election.

The German economy continued its expansion in the second quarter and the Bundesbank has said that momentum remains strong as rising employment encourages private consumption.

Joblessness fell by about 3,000 in west Germany and 2,000 in the eastern part of the country.

In the euro area, unemployment probably remained at 9.1 per cent. Eurostat will publish those data, along with consumer prices, at 11am Frankfurt time.

BLOOMBERG