The number of persons out of work in Germany remained unchanged in May, while the jobless rate ticked down suggesting that the economy's strong resilience to the turmoil in the rest of euro area prompted employers to hold on to their hiring plans.
Seasonally adjusted unemployment remained unchanged at 2.872 million in May, while economists had forecast a decline of 7,000. In April, the number of unemployed increased by a revised 18,000.
The unemployment rate edged down to 6.7 percent in May from 6.8 percent in April. Economists had expected the rate to hold steady at 6.8 percent for a fifth straight month.
On an unadjusted basis, the jobless rate was 6.7 percent, falling below 7 percent for the first time in five months. Unemployment fell by 108,000 in May on a non-seasonally adjusted basis, bringing the total to the lowest level since December last year.
"However, this is the weakest May improvement since 2002," said Carsten Brzeski, senior economist at ING Bank NV. Today's numbers illustrate the strength of domestic demand, at least partly cushioning the German economy against the negative impact from the debt crisis, he added.
"However, signs are increasing that the resilience of the German labour market is slowly cracking up," Brzeski said.
Confidence among German businesses fell to a six-month low in May as concerns over a possible Greek exit from Eurozone weighed on firms' optimism, a survey by the Ifo Institute showed earlier this month. Increasing uncertainty in the Eurozone is impacting the German economy, the think tank said in the report.
Meanwhile, the Federal Statistical Office said Thursday that the unemployment rate fell to 5.4 percent in April from 5.5 percent in March. The number of unemployed persons fell 5.2 percent month-on-month to 2.19 million. This was 12 percent lower than last year, according to the statistical office.
Employment dropped slightly by 0.8 percent on a monthly basis to 39.58 million. On an annual basis, the number of employed persons fell 0.1 percent.
Meanwhile, the German Chamber of Industry and Commerce (DIHK) on Wednesday said firms expect notable improvement in current situation and future prospects. The industry group raised its 2012 growth forecast for the economy to 1.3 percent.
The Organization for Economic Co-operation and Development expects Germany to grow 1.2 percent in 2012 and 2 percent next year.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.