U.S. Markets

German jobless total falls, employment hits record high

Office buildings are pictured in the financial district of Frankfurt, Germany, September 15, 2018. Picture taken September 15, 2018. REUTERS/Ralph Orlowski

BERLIN (Reuters) - Germany’s jobless total fell in October and employment hit a record high in September, data showed on Tuesday, underlining the strength of a labor market that is supporting a consumer-led upswing in Europe’s largest economy.

The Federal Labour Office said the seasonally adjusted jobless total fell by 11,000 to 2.292 million, slightly below the predicted drop of 12,000.

The unemployment rate remained unchanged at 5.1 percent, the lowest since German reunification in 1990.

“Thanks to the continuing boom, the labor market is still in good shape...,” KfW economist Joerg Zeuner said.

“In some sectors, however, shortages of skilled workers and young recruits are hampering the expansion of production. The care sector and the building trade are particularly affected.”

In a politically risky push to fill a record number of job vacancies and stabilize the public pension system, Chancellor Angela Merkel’s coalition parties earlier this month agreed on a new immigration law to attract more skilled workers from countries outside the European Union.

In a further positive sign, seasonally adjusted employment as measured by the International Labour Organisation climbed by 557,000 on the year to a record of 45.0 million in September, separate Federal Statistics Office data showed.

Household spending has become an important growth driver in Germany as record-high employment, increased job security, above-inflation pay hikes and low borrowing costs all help open shoppers’ wallets.

A survey last week showed that German shoppers look keen to spend in November, but their expectations for the economy and their own personal income have slipped on worries about international trade conflicts and Brexit.

Reporting by Michael Nienaber, editing by John Stonestreet