German Joblessness Dropped Before Virus Forced New Restrictions

(Bloomberg) -- German unemployment declined for a fourth month in October, before Europe’s largest economy announced tighter restrictions to slow the spread of the pandemic.

A drop of 35,000 left the total number of jobless people at 2.86 million and the unemployment rate at 6.2%, the Federal Labor Agency said Thursday. The jobs market is currently being propped up by government subsidies, with more than 3 million workers on furlough programs, according to estimates by the Ifo Institute.

That number provides some good news for an economy headed into partial lockdown that will almost certainly derail the recovery and hit the labor market.

Businesses are already feeling the strain from earlier restrictions. Confidence dropped for the first time in six months in October, according to a gauge published Monday, and the country’s services sector is shrinking again.

European Central Bank officials will discuss the state of the region’s economy at a meeting on Thursday. On Friday, Eurostat will provide updates on euro-area unemployment, inflation and gross domestic product.

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