German unemployment rate remained unchanged at its lowest level in two decades in February despite the slowdown in economic growth at the end of 2011, the latest figures from the Federal Labor Agency showed Wednesday.
The seasonally adjusted jobless rate stood at 6.8 percent, unchanged from the revised rate for January. The January reading was upwardly revised from the 6.7 percent rate estimated initially.
This was the lowest rate since the reunification of Germany more than two decades ago. Economists had expected the rate to have remained steady at 6.7 percent.
After seasonal adjustment, the number of unemployed persons held steady at 2.87 million in February following a decrease of 26,000 in January. Economists expected the number of unemployed to decline by 5,000 persons over the month.
On an unadjusted basis, the number of unemployed persons increased by 25,717 from a month earlier to 3.1 million in February. This was, however, 6.1 percent less than last year's level. The unadjusted jobless rate edged up to 7.4 percent this month from 7.3 percent in January.
The labor market performance over the past years is another illustration of the German economy's outstanding position within the Eurozone, said Carsten Brzeski, a senior economist at ING Bank NV.
However, Brzeski noted that the strong dynamics of last year will not be repeated this year. "With lower growth and an unemployment rate close to the natural rate, the job miracle should gradually come to an end, entering a period of consolidation," the economist said.
According to the labor force survey published by the Federal Statistical Office today, the seasonally adjusted jobless rate rose to 5.8 percent in January from 5.7 percent in December. However, this was 0.7 percentage point below the rate recorded during the same month last year.
The Ifo institute's survey revealed this month that German business sentiment rose to a seven-month high in February as companies turned more optimistic about future and assessed the current situation as favorable.
The latest survey by market research group GfK showed yesterday that strong labor market and income expectations are likely to lift consumer confidence further in March. Nonetheless, Germans were of the view that the recovery of the economy will not occur entirely smoothly, given the prolonged debt crisis in Eurozone.
The economy shrank 0.2 percent quarter-on-quarter in the fourth quarter. In 2011, growth slowed to 3 percent from 3.7 percent in 2010. In its Interim forecast released last week, the European Commission cut the German GDP forecast for this year marginally to 0.6 percent from 0.8 percent.
by RTT Staff Writer
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