Germany Unemployment Rate Steadies at 6.9%
Germany’s unemployment rate steadied at 6.9 percent in December, as joblessness fell for the first time in five months.
Fifteen thousand fewer people sought jobless benefits last month, according to the Nuremberg-based Federal Labour Agency. This represents the biggest drop in two years, with the number of unemployed falling to a seasonally-adjusted 2.965 million. Jobless claims rose by 10,000 the previous month. Analysts forecasted no change to unemployment levels in November.
“A robust jobs report for the end of the year provides further support for a strong finish to 2013 from consumer spending,” said Christian Schulz of London’s Berenberg Bank. “Strong labour-market data raises the chances of stronger wage growth in 2014 and thus higher consumption.”
Europe’s largest economy has relied on domestic demand to fuel its recovery. Germany’s private sector was a key source of jobs growth in December, according to Markit Group’s latest PMI figures. The nation’s service economy expanded at a robust pace last month, led by higher levels of business activity across the entire sector.
Germany is one of the few bright spots in the euro area, which struggled to sustain its momentum at the end of 2013. According to the European Union, Eurozone inflation eased to 0.8 percent in December, raising concerns the currency bloc will be hard-pressed to reach the European Central Bank’s lofty growth projections for this year. Eurozone unemployment is at a near-record high of 12.1 percent.
Germany added more than 230,000 jobs in 2013, led by a strong upsurge of foreign workers. This figure could rise in 2014, when citizens from Romania and Bulgaria are allowed to seek employment in Europe’s largest economy.
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