Berlin (dpa) – German unemployment fell sharply in March, as a pickup in Europe’s biggest economy resulted in hiring gaining pace and the jobless rate sinking to an historic low.
The month-on-month jobless rate edged down from 5.9 per cent in February to 5.8 per cent in March – its lowest level since German unification in 1990 – after the numbers out of work dropped by a more-than-forecast seasonally adjusted 30,000 to 2.556 million, the Federal Labour Agency said on Friday.
Analysts had expected the numbers out of work to drop by 10,000 in March.
“The labour market continues to develop favourably,” said labour agency chief Detlef Scheele.
“The number of unemployed fell significantly with the onset of spring, while employment growth continues unabated and demand for new employees remains high,” he said.
The robust state of the jobs market also helps to bolster Chancellor Angela Merkel’s conservative Christian Democrats’ prospects in two key state elections set for May, as well as for the national poll in September.
Monthly jobless queues in Germany have now contracted for the sixth consecutive month, with economists expecting the labour market to continue to strengthen as the year unfolds.
“The German labour market is in uncharted territory,” said Claus Vistesen, chief eurozone economist with the Pantheon economics research group.
“(Jobless) claims are falling at a rate not seen before, the unemployment rate is at levels well below the low in previous business cycle upturns, and the ratio of vacancies-to-unemployed is shooting higher,” he said.
The labour agency’s indicator measuring jobs vacancies released on Thursday hit a record high of 227 points in March, 17 points higher than the same month last year.
In seasonally unadjusted terms, unemployment in March fell by 100,000 to 2.662 million, resulting in the unadjusted jobless rate edging down to 6 per cent this month from 6.3 per cent in February, the labour agency said.
The buoyant state of the labour market fits in with the general upbeat picture that has emerged of the German economy in the opening months of the year.
German business confidence climbed to near a six-year high in March amid growing optimism about the outlook for the country’s economy, according to the Munich-based Ifo economic institute’s closely watched index released on Monday.
The strong gain reported by the Ifo also showed executives brushing aside worries about the current climate of uncertainty shaping the global economy, including a new unpredictable US administration and Britain’s plans to exit the European Union.
The steady fall in German unemployment is also adding to analysts’ expectations that a strong jobs market will encourage consumers to open their wallets and to spend, resulting in household spending again playing a key role in driving economic growth.
Data also released on Friday by the Federal Statistics Office showed monthly retail sales rising by a more-than-forecast 1.8 per cent in February.