UNEXPECTEDLY strong hiring by German businesses pushed unemployment to record lows, figures out yesterday from the Federal Labour Office revealed.
A seasonally adjusted fall of 26,000 over the last month greatly exceeded the 8,000 predicted by economists.
That takes the total unemployment level down 231,000 over the year to September, to 2.79m – the first time unemployment has fallen below 2.8m since reunification in 1990.
With other economic indicators stalling or going into decline, these positive figures are prompting some to hope that Germany may be less badly hit by the economic slowdown than was previously feared.
“In face of the uncertainty on the financial markets, the labour markets are having a stabilising effect on the economy as whole,” said economy minister Philipp Roesler.
The hope is that the positive figures may give a lift to consumer spending and, as Germany is the EU’s largest economy, a boost to the Eurozone as a whole.
That in turn could impact on the European Central Bank’s (ECB) chances of cutting interest rates to counter the downturn.
“There is less reason for a swift interest rate cut,” said DekaBank’s Ulrich Kater. “The economy is clearly not about to stall – there is some weakness but nothing that would trigger panic mode at the ECB.”