German unemployment sinks to 16-year low
Published on: 01 Jul 2008 14:39 CET
The number of people out of work in Europe’s largest economy dropped by 123,000 to 3.16 million in the month – the lowest figure since December 1992. The Labour Agency in Nuremberg said the unemployment rate dropped from 7.8 percent to 7.5 percent, down considerably from 8.8 percent a year ago.
Germany’s economy has continued to add jobs this year despite a global slowdown. The head of the Labour Agency, Frank-Jürgen Weise, said the buoyant labour market had been helped by the economic upswing this spring and that 1.4 million new jobs had been created since the 2006.
"Unemployment is falling and employment continues to grow. Demand by companies for workers remains strong," he said in a statement.
Weise said should conditions remain favourable, Germany could see unemployment drop below three million this autumn for the first time since November 1992. “There’s a fifty-fifty chance,” he said.
The seasonally adjusted unemployment figure, which is followed more closely by economists, fell by 38,000 in June to 3.266 million, exceeding the forecast of 10,000 by analysts polled by Dow Jones Newswires.
But many economists think German unemployment could soon begin to rise again. "The best times for the German labour market are definitely over," said Commerzbank economist Eckart Tuchtfeld. "Monetary policy is slightly restrictive and is set to become even more so, the global economy is losing momentum, the euro is strong and the price of oil is high."
"While the monthly unemployment figures should continue to fall up to the end of the year, the decrease will no doubt become smaller and smaller," he predicted.