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Unemployment at historic low despite growth fears

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Unemployment at historic low despite growth fears
A worker climbs into a car at the end of an Opel production line in Eisenach, Thuringia. Photo: DPA
11:09 CEST+02:00
Germany kept unemployment at historic lows in April as the recovery in Europe's biggest economy remains on track, unfazed by global uncertainties and a huge influx of refugees, data showed on Thursday.

The unemployment rate - which measures the jobless total against the working population as a whole - stood at 6.2 percent in April, unchanged from March.

In numerical terms, the number of people registered as unemployed in Germany declined by 16,000 to a seasonally-adjusted 2,706 million, the Federal Labour Office said in a statement.

At current levels, unemployment now stands at the lowest level since West and East Germany reunited in 1990 after the fall of the Berlin Wall the previous year.

In raw, or unadjusted, terms, the jobless total decreased, falling by 101,000 to 2.74 million. The unemployment rate fell to 6.3 percent in April from 6.5 percent in March, the office said.

"The German economy is expected to show tangible growth in the first quarter of 2016, even if the level of growth won't be maintained over the course of the year," the labour office said.

"In view of the global uncertainties, economic expectations are pointing to a moderate upturn. The labour market is continuing to develop positively," the office said.

'Precarious forms of employment'

Opponents of Chancellor Angela Merkel's government have long complained that employment figures are boosted by large numbers of people in low-quality work.

"The government's jobs miracle is and will remain a flop," Left Party labour spokeswoman Jutta Krellmann told The Local.

More than one million people in Germany still rely on welfare benefits to top up low salaries, and many people are not included in unemployment figures because they are too old or have so-called "one-Euro jobs" assigned by Jobcentres, Krellmann pointed out.

"Work is divided among several people using precarious forms of employment like 'Mini-jobs', forced part-time work and successive limited-term contracts," Krellmann said.

"Good work should not be time-limited, should be paid according to collective bargaining agreements and co-determined [between managers and employees]."

Growth predictions down

The continued high employment figures were released just days after the Federation of German Industry (BDI) slashed growth projections for 2016.

On Monday, BDI President Ulrich Grillo warned that conflicts around the world would put a damper on growth this year, saying German GDP would not gain the expected 1.9 percent but rather “between 1.5 and 2.0 percent”.

“German industries feel this increase in conflicts, risks and weakening growth more strongly than other economies,” Grillo said, arguing that the economy remains too dependent on exports.

While the country's economy continues to be propped up by shopping-happy consumers, Grillo went on, “our economic house of cards can fall down” if the public lose confidence and return to saving instead of spending.

Consumer confidence rose in April, market research company GfK found in a poll published on Wednesday, and is expected to continue growing in May.

with AFP, DPA

CORRECTION: This article originally misstated the name of MP Jutta Krellmann as Julia Krellmann. We regret the error.

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