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German unemployment hits surprise record low

Unemployment in Germany hit a surprise new low in September, newly-released official data show, the latest in a string of sunny indicators as the upswing continues in Europe’s top economy.

The proportion of people out of work fell to 5.6 per cent this month, the Federal Labour Agency said, while analysts had expected the figure to hold steady at 5.7 per cent.

The drop means unemployment has reached a new all-time low since German reunification in 1990.

“The labour market continues to develop in a very positive way,” labour agency head Detlef Scheele said in a statement.

“Unemployment fell by more than usual in September,” he added.

In seasonally-adjusted figures, the number of people registered as out of work fell by 23,000 to some 2.5 million people.

The data will likely be welcomed by Chancellor Angela Merkel whose conservative block emerged as the largest party in the recent general election but a weaker-than-expected showing means it will now have to consider a complicated three-way coalition alliance.

On the campaign trail, Merkel vowed to achieve full employment – or an unemployment rate of around 3.0 per cent – by 2025.

Most economists expect a run of solid economic growth in Germany to continue towards the end of the year, keeping unemployment in check.

Recent surveys of consumers, business leaders and investors all showed strong confidence in the economy, powered by robust domestic and foreign demand.

IHS Markit analysts said they expected the decline in unemployment to slow down but remain low “for the foreseeable future” as hundreds of thousands migrants who have arrived in Germany since 2015 gradually enter the work force, offsetting concerns about a greying population.

© AFP

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