The seasonally adjusted jobless rate ticked down to 6.3 percent in September, from 6.4 percent in August, the BA federal labour agency said.
“The impact of the corona pandemic on the labour market is still clearly visible. However, there are slight signs of improvement,” said the BA's Daniel Terzenbach.
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Coronavirus lockdowns brought the economy to a halt initially but as factories and businesses have returned to work, sentiment has improved.
Economy Minister Peter Altmaier said recently that Germany was on track for a “V-shaped” recovery, signalling a strong upswing in the economy after a considerable decline in earlier in the year.
Government-backed short-time work schemes, called “Kurzarbeit” in German, have softened the blow, saving hundreds of thousands of jobs.
The number of people in short-time work fell in September to 4.2 million from a peak in April of 5.95 million, the BA agency said, although both numbers are considerably higher than at the height of the financial crash in 2009.
Before the coronavirus struck, German joblessness had hovered at a record low of around five percent.
But prospects may darken as the country moves into the colder autumn and winter months and fears grow about a recent uptick in coronavirus cases.
Chancellor Angela Merkel on Tuesday announced new measures to tackle the increase, including restrictions on parties and family gatherings.
“Unemployment should fall by the end of the year,” said Fritzi Köhler-Geib, economist at Germany's public investment bank KfW.
“However, we can assume that the number of infections will rise again in the autumn. This could lead to a further slowdown in the economic recovery.”