German unemployment rate sees surprise fall in January

At least one Eurozone country isn't struggling.

German unemployment fell by a seasonally adjusted 28,000 in January, much greater than December's 15,000 drop. Economists had expected unemployment to fall by just 5,000.

Berenberg's Rob Wood says that this reflects a German economy that "is humming along", with this fall the largest in two-and-a-half years.

That sees the headline jobless rate at 6.8 per cent, down from December's estimate, and beating analyst expectations.

Consensus forecasts had suggested that the rate would remain unchanged from last month's 6.9 per cent estimate. That figure has been revised down to 6.8 per cent.

Wood says that "the short-term outlook for job creation remains bright given the strengthening growth indicators", including Monday's Ifo numbers.

Yet despite continuing job creation - unemployment is little changed on last year.

This is in part because companies are "facing difficulties in finding the right qualifications within the remaining pool of unemployed", says Wood.

Strip out the seasonal adjustments to the data and the German jobless total is at 3.316m in January, up from 2.873m in the previous month.