The German jobless rate stayed at record low levels in February and consumer confidence is on the upswing, official data showed on Thursday.
In seasonally-adjusted terms, the number of people registered as unemployed at Germany’s Federal Employment Agency decreased for the fifth consecutive month in February by 20,000 people to 2.81 million.
The jobless rate stayed unchanged at 6.5 percent, the lowest level in more than two decades.
“In February, the positive trend has continued in the labor market. Unemployment has fallen and employment retains its upward trend,” said Frank-J. Weise, chief of the Nuremberg-based labor agency.
A separate report from German federal statistical office Destatis on Thursday showed that roughly 42.5 million persons living in Germany were in employment in January. After accounting for seasonal fluctuations, the unemployment rate as measured by the International Labour Organization (ILO) in January fell to 4.7 percent from 4.8 percent in December 2014 when the average ILO jobless rate in the eurozone stood at 11.4 percent.
Compared with most of its eurozone fellows, Germany enjoys a healthier labor market.
High employment was seen as one of key factors supporting Germany’s economic revival at the end of last year when Europe’s biggest economy expanded by 0.7 percent following a weak phase in the summer months. Over the whole year of 2014, the German economy grew by 1.6 percent.
“The labor market remains the backbone of the German economy. Thanks to earlier reforms, ageing and immigration from crisis-battered eurozone countries, the German labor market has become solid as a rock and less affected by short-term volatility of the economy,” said Carsten Brzeski, a chief economist at ING DiBa bank.
“Combined with low inflation and wage increases of around 3 percent, it is no surprise that German consumers are currently very optimistic,” Brzeski said.
Earlier on Thursday, market research institute GfK said German consumers’ confidence hit its highest value since October 2001. They were also more willing to purchase than any other time since December 2006, thanks to a stable labor market, low interest rates, and falling energy prices.
GfK said private consumer spending would increase by 1.5 percent this year and once again play a key role in economic development.
This view was echoed by Brzeski who said the labor market would remain a “self-priming pump of the German economy and an important growth driver” when looking ahead. Enditem