German Unemployment Falls as Companies Overcome Soft Patch

(Bloomberg) -- German unemployment slid again in April as companies in Europe’s largest economy took on personnel to meet strong demand.

The number of people out of work declined by a seasonally adjusted 7,000 to 2.37 million, the Federal Labor Agency in Nuremberg said on Friday. Economists in a Bloomberg survey had predicted a drop of 15,000. The jobless rate held at a record low of 5.3 percent reached in March, matching the forecast.

Germany’s export-driven economy has benefited from the global recovery, with growth last year at the fastest level since 2011. That in turn has encouraged companies to take on more staff and eventually begin to raise pay. Yet, given its international focus, the country could be particularly vulnerable to protectionist trade measures and some recent economic data have shown momentum may be peaking.

Joblessness fell by about 6,000 in west Germany and by 2,000 in the eastern part of the country. German unemployment’s continued decline has surprised analysts even as labor shortages become evident.

“Who would’ve thought eight or nine years ago that we’d be where we are today, and still with an optimistic outlook,” labor agency head Detlef Scheele said. “The decreases will moderate.”

Some sentiment indicators in Europe’s largest economy unexpectedly picked up at the beginning of the second quarter, moderating a slowdown at the start of the year. Growth rates in both manufacturing output and services picked up slightly and employment increased at a faster pace, data from IHS Markit showed.

Economy Minister Peter Altmaier appeared to confirm that there’s no slowdown looming, saying earlier this week in Berlin that the growth remains robust. The government forecasts an expansion of 2.3 percent this year.

“Our exporters are competing successfully in a global economy that is expanding briskly,” he said. “Employment will increase by a further 1 million by 2019, unemployment will fall to a new record low.”

©2018 Bloomberg L.P.

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