German Jobless Rate Falls
November 2, 2006
The German jobless rate fell below 10 percent for the first time in four years in October, as the recovery in the euro zone's biggest economy continued to gather momentum, official data showed on Thursday.
The jobless total fell by 152,000 to just under 4.1 million in October in raw or unadjusted terms, bringing the jobless rate down to 9.8 percent from 10.1 percent a month earlier, the Federal Labor Agency in Nuremberg calculated.
An autumn upturn
Labor office chief Frank-Jürgen Weise said the usual autumn upturn was having a positive effect on the labor market and added that even after taking seasonal factors into account, there was also a reduction in the jobless queues this month.
The government was quick to hail the latest jobless data as a "breakthrough."
"All the moaners and kill-joys can no longer deny it -- we have a breakthrough on the labor market," Labor Minister Franz Müntefering said. "We have cause for celebration."
Seasonally adjusted data published separately by Germany's central bank showed a decline in the German jobless total of about 67,000 to 4.3 million in October.
Rate falls slightly in the east
The adjusted jobless rate also remained declined to 10.4 percent from 10.6 percent a month earlier, the German bank said.
A regional breakdown of the numbers showed that unemployment in the economically more important west of Germany decreased by 56,000 to 2.89 million in seasonally adjusted terms last month, reducing the adjusted jobless rate to 8.7 percent from 8.9 percent.
In the former communist east, the seasonally adjusted jobless total was up by 11,000 to 1.46 million, trimming the jobless rate to 17.1 percent from 17.2 percent.
No help to Merkel
The release of the latest jobless data comes in the wake of key economic sentiment surveys showing a pickup in both consumer and business confidence.
UBS economist Stephane Deo said he believed the German economy, for a long time one of the worst-performing economies in the 12-nation euro zone, had "improved structurally, notably in terms of internal competitiveness."
However, Chancellor Angela Merkel's ruling grand coalition has been unable to reap any political benefits from both the improvement in the labor market and the nation's solid growth performance with opinion polls showing falling support for her government.
Indeed, the drop in unemployment and an economic upswing have failed to help cancel out the electoral fallout for the Merkel-led government following its deeply unpopular plans for both health reform and a hike in sales tax.
A poll released earlier this week showed backing for Merkel's conservative political bloc, which 12 months ago forged a grand coalition government with the Social Democrats, has fallen to a record low of 28 percent.