German unemployment fell sharply for a second month in March, pushing the jobless rate down to 7.1 per cent, its lowest level since figures for a unified Germany were first published two decades ago.
In a sign that demand for labour remains robust in Europe's largest economy, the Federal Labour Office said unemployment fell by 55,000 in March after a drop of 54,000 in February.
The decline, which was helped by mild weather conditions, brought the overall unemployment total to 3.005m, and took the sting out of an unexpected drop in retail sales for February which economists said was linked to rising inflation.
"It is obvious that German consumers will not engage in a spending spree," said Carsten Brzeski at ING Financial Markets.
"However, with pent-up demand over the last years, strong economic prospects, more people at work and higher wages, the fundamentals for decent consumption boom in Germany have hardly been better since reunification."
Labour Office head Frank-Juergen Weise said demand for labour was "high" and that growth in full-benefits paying jobs was continuing.
The German government used a number of job boosting schemes, including "Kurzarbeit" subsidies, to cushion the blow from a record contraction in gross domestic product (GDP) in 2009.
The measures helped the German labour market outperform its peers in Europe at the height of the global financial crisis and the economy has gone from strength to strength since.
City A.M. Reporter