German Unemployment Unexpectedly Drops Most in Six Months

By Alessandro Speciale  

Photographer: Krisztian Bocsi/Bloomberg

Visitors look at employment opportunities displayed on a job board at a job fair for... Read More

German unemployment unexpectedly declined in October, dropping the most in six months in a sign of companies’ confidence in the underlying strength of Europe’s largest economy.
The number of people out of work declined a seasonally adjusted 22,000 to 2.887 million in October, the Nuremberg-based Federal Labor Agency said today. Economists forecast an increase of 4,000, according to the median of 29 estimates in a Bloomberg News survey. The adjusted jobless rate was unchanged at 6.7 percent, the lowest level in more than two decades.
Germany’s economy eked out little, if any, growth in the third quarter after contracting in the April-June period, the Bundesbank has said. Even though recent
surveys point to a decline in business sentiment, demand for labor is on the rise, with a measure of job openings at the highest level in almost three years.
“The state of the economy is still OK and the labor market relatively healthy, despite weak data in recent weeks,” said Carsten Klude, head of investment strategy at M.M. Warburg & Co. in Hamburg. “What we have heard from companies in this earning season showed that the third quarter probably wasn’t so bad.”
The number of people out of work fell by 18,000 in western Germany and dropped by 4,000 in the east, today’s report showed.

Photographer: Martin Leissl/Bloomberg

Lufthansa AG, Europe’s second-largest airline, said it will add 1,200 on-board jobs as... Read More

While the German government cut its outlook for 2014 and 2015, citing “geopolitical crises” and sluggish global growth, it says domestic demand remains “intact.”

Adding Jobs

Lufthansa AG, Europe’s second-largest airline, said it will add 1,200 on-board jobs as it plans to add new long-haul routes. Companies like Bosch Rexroth AG have shortened working hours to bridge a lull in orders.
The Ifo institute’s gauge of German business climate dropped for a sixth month in October while investor confidence as measured by ZEW fell to the lowest level in almost two years. Factory orders, industrial production and exports plunged in August by the most since 2009.
“The current economic uncertainty isn’t reflected in the labor market,” Frank-Juergen Weise, president of the labor agency, said in a statement. The “autumn revival” of the job market pushed unemployment down “significantly,” he said.
Joblessness in the 18-nation euro region, Germany’s largest export market, probably held at 11.5 percent in September, according to a separate survey. Eurostat will publish data tomorrow.