China Financial Daily

German unemployment rate reduced with an unexpected number in October, 2009
News on Oct.29,2009: Germany’s unemployment rate recorded an unexpectedly large fall in October, official figures showed on Thursday, creating hope of a possible economic recovery in Europe’s biggest economy.

The unadjusted jobless rate in October in Germany stood at 7.7 percent, down from 8 percent in the previous month and below the 8.3 percent in August, the Nuremburg-based Federal Labor Agency said on Thursday. It is the third consecutive month the rate has fallen.

The agency said a total of 3,229 million people were registered as unemployed in October, 118,000 fewer than the previous month. Local analysts had earlier predicted a drop of between 40,000-60,000.

Frank-Juergen Weise, the agency’s head, said government measures, including short-time work with incentives to hold on to staff, are helping to keep unemployment down.

The dip in unemployment comes nearly two weeks after the German government raised its growth forecast and predicted that the country would expand by 1.2 percent in 2010, up from an earlier prediction of 0.5 percent.

The new forecasts were also more optimistic about this year, predicting the economy would shrink by 5 percent instead of the 6 percent foreseen in April.

The fall also eases pressure on Chancellor Angela Merkel as she begins her second term in office.

Merkel, who was sworn in for a second term earlier on Wednesday, has pledged tax cuts worth 24 billion euros (around 35 billion U.S. dollars) even as the budget deficit widens, in a bid to shore up growth in the economic engine of the European Union.

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