Unemployment in Germany declined more than expected in March, and the jobless rate hit the lowest level since the reunification of Germany two decades ago, data from the Federal Labor Agency showed Thursday.
The number of unemployed declined by 18,000 from a month earlier in March to 2.84 million, while expectation were for a decline of 10,000. The outcome was better than February's, when unemployment fell by 3,000.
The rate of unemployment declined to new record low of 6.7 percent in March from 6.8 percent in February. Economists had forecast the jobless rate to remain steady at 6.8 percent.
According to the Federal Statistical Office, the adjusted unemployment rate remained unchanged at 5.7 percent in February. The number of unemployed persons fell to 2.49 million in February from 2.66 million in January.
"The German labour remains rather resilient to the soft patch of the economy at the end of last year," Carsten Brzeski, senior economist at ING Bank NV said.
"The mild March weather and almost unshattered business optimism seem be the most important drivers behind today's drop in unemployment. The resilience of the German labor market bodes well for private consumption in the first half of the year."
The most recent Manpower Employment Outlook Survey revealed that hiring plans among German employers remained cautiously optimistic. Despite the euro crisis, the number of employers intending to recruit staff in the coming quarter continued to rise, it said.
Survey data from the Munich-based Ifo institute revealed earlier this month that business confidence improved for a fifth month in March.
Lower income expectations due to fuel price hike is likely to weigh on consumer optimism in Germany in April, a survey by GfK showed Tuesday. However, easing debt crisis and still strong labor market conditions are supporting households' economic expectations.
The improvement in labor market conditions adds to evidence that the economy might have bounced back after a 0.2 percent contraction in the fourth quarter. The European Commission forecast the economy to grow 0.6 percent this year.
by RTT Staff Writer
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