Berlin: Germany's unemployment held at the lowest in more than two decades in February, adding to signs Europe's largest economy is regaining some strength after shrinking in the fourth quarter.
The adjusted jobless rate held at 6.8 per cent from January, the Nuremberg-based Federal Labour Agency said yesterday. That's the lowest since Germany's reunification.
The number of people out of work remained at 2.87 million after declining 26,000 in January. Economists forecast a drop of 5,000 in February, the median of 29 estimates in a Bloomberg News survey showed.
Germany's economy may help counter a slump in the 17-nation currency area as governments from Spain to Ireland toughen spending cuts, hurting hiring and consumer demand.
While the European Commission on February 23 forecast the region's economy to shrink this year, German executives grew more optimistic this month and investor sentiment rebounded.
Further improvement
"Germans hardly feel affected by the Eurozone debt crisis — the crisis has simply not reached the German labour market," said Carsten Brzeski, an economist at ING Group in Brussels.
"Looking ahead, all available indicators still point to a further improvement of the German labour market" though "the job miracle should gradually come to an end".
The euro traded at $1.3448 in Frankfurt, little changed on the day. Germany's benchmark DAX Index rose for a second day, gaining 0.9 per cent, while the Euro Stoxx 600 Index advanced 0.7 per cent.
The economy is already showing some signs of recovery after shrinking 0.2 per cent in the fourth quarter. German business confidence rose to the highest in seven months in February while investor sentiment surged to a ten-month high. Consumer confidence will increase to a 12-month high in March, partly helped by falling unemployment, GfK SE said on Tuesday.
Labour agency head Frank-Juergen Weise told reporters that while there are risks that unemployment may exceed 3 million this year, the adjusted numbers for February "definitely don't mark the turning point".
"We'd need three months of rising unemployment and other negative indicators," he said.
"The situation is robust. What we saw this month was the impact of winter weather."
Strengthening economies in Asia may help bolster export demand and encourage German hiring. In Japan, industrial output rose 2 per cent in January from the previous month, the Trade Ministry in Tokyo said yesterday. South Korean production climbed 3.3 per cent, a separate report showed.