Surprise Fall in German Jobless Numbers

04 July 2008

NURNBERG: The German economy - Europe's largest - appears to be weathering the global economic storm according to figures that show jobless levels dropping to a 16-year low in June.

The country's labour agency said unemployment fell slightly to 7.8% from May's 7.9%. The number of those out of work in Germany dropped by 38,000, to a seasonally adjusted total of 3.27 million.

Comments Eckart Tuchfeld, economist with Commerzbank: "The numbers out of work (in June) have been a positive surprise. Nevertheless, at least for the medium term the best times are now behind the labour market."

Retail sales are still holding up, with a rise of 1.3% in May, according to the national statistics office – a 0.7% year-on-year increase.

German consumers are continuing to spend, thanks to higher wage settlements and the robust labour market. Inflationary pressures are being ignored – for the time being.

The country's central Bundesbank has revised upwards its economic growth rate for 2008 to 2.25%, from a forecast 1.9%.

Exports are looking particularly strong, with growing demand from emerging nations in Asia, Eastern Europe and the Middle East.

Data sourced from Deutsche Welle (Germany); additional content by WARC staff