The jobless rate fell 0.2 percentage points from its level in February to 8.4 percent. Compared to March 2007 the number of jobless fell by 617,000. Adjusted for the usual rise in employment in spring, the number of people out of work fell by 55,000 - better than a fall of 40,000 forecast by economists in a survey by Thomson Financial.
The number was nonetheless weaker than the monthly average since September, when roughly 67,000 people were removed from the jobless list.
The Labour Agency itself noted that "a drop in March is normal as spring arrives, but the fall is not quite as strong as last year."
Its president Frank-Josef Weise estimated that "employment continues to grow and business demand for labour remains strong." Two schools of thought are currently debating the direction in which German employment is likely to go in the coming months.
Optimists lead by Economy Minister Michael Glos hope to see the country reach full employment within ten years.
The pessimistic view was demonstrated Monday by a study in the Frankfurter Allgemeine Zeitung newspaper, which studied announcements concerning the creation or elimination of 100 jobs or more during the first quarter of the year. Major companies were found to have unveiled almost twice as many job cuts as creations, the newspaper found.
But its results were contested by certain economists who note that small- and medium-sized enterprises that form the backbone of German industry continue to hire without making headlines, whereas the media gives major coverage to job cuts by high-profile German companies.
"The latest figures indicate that the German labour market is on a roll - at least for the time being," said Andreas Rees, chief German economist at UniCredit Markets. "We expect the demand for labor to be strong in the months ahead."
"A deceleration will probably kick in only in autumn or even later this year," he added.