BERLIN Jan 7 German unemployment unexpectedly
fell in December on a seasonally adjusted basis, the first drop
since July, the Labour Office said on Tuesday, bolstering hopes
that domestic consumption could lift growth in Europe's biggest
The number of people out of work fell by 15,000 to 2.965
million, the biggest decrease in two years, data showed,
compared to a consensus of no change in a Reuters poll.
The jobless rate held steady at 6.9 percent, close to its
lowest level since Germany reunified more than two decades ago.
Labour Office chief Frank-Juergen Weise expressed optimism
about the coming year.
"The economic expectations are good," he told reporters,
saying early indicators pointed to a stable labour market in the
next few months.
"A robust jobs report ... provides further support for a
strong finish to 2013 from consumer spending," said Christian
Schulz, economist at Berenberg Bank, and "raises the chances of
stronger wage growth in 2014 and thus higher consumption".
Berlin is relying on German consumers to support economic
growth this year as the traditionally export-driven economy
suffers from a slowdown in some emerging markets and fragile
demand from the euro zone.
The Labour Office also said that the unemployment rate for
the whole of 2013 dropped 0.1 percentage point to 6.9 percent.
Germany's jobless rate has held steady at just below 7.0
percent for more than two years and is the envy of crisis-hit
euro zone partners such as Spain and Greece where more than one
in four people is officially out of work.
The figures are good news for conservative Chancellor Angela
Merkel who formed a 'grand coalition' government with the Social
Democrats (SPD) at the end of last year, which plans to increase
public spending and introduce a minimum wage.
"Less unemployment further alleviates the burden on the
public purse and thus opens up room for more public investment
as agreed by the new grand coalition government," said Schulz.
However, it is not plain sailing for everyone. Several
companies have announced job cuts in the last few weeks.
Airbus announced about 5,800 jobs cut mainly in its
defence and space businesses as part of restructuring last month
and sources have told Reuters that Deutsche Telekom
plans to cut 4,000 jobs at its IT services business.
Koenig & Bauer, the world's second-biggest maker
of printing presses, also said last month it planned to lose up
to 1,500 jobs.
Some of Germany's economic institutes have also warned that
plans by Merkel's new government to introduce a minimum wage may
cause long-term job losses.