cutting programmes aimed at reducing labour costs. As a result, most analysts are not expecting any real improvement in the German labour market until later in the year or possibly even early next year. "We see the labour market stabilizing in the next few months with a noticeable improvement in 2005," said Ralph Solveen, economist with Commerzbank AG. After growing at less than two per cent this year, some economists now expect the German economy to steam ahead by as much as three per cent in 2005. Analysts say the German economy starts to create jobs when it has exceeded the two per-cent growth mark. Nonetheless, high unemployment has cast a shadow over consumer sentiment in the nation, and weak consumer demand has been slowing the recent recovery after three years of economic stagnation. Employers' reluctance to take on workers was also evident in official data released Wednesday which showed that employment in the country contracted by 10,000 in May, the latest available monthly data. The number of job vacancies fell by 2,000 in July after dropping by 4,000 in June. While seasonally adjusted unemployment in Germany's key western half rose by 15,000, it dropped by 4,000 in the eastern part of the nation. However, with 18.5 per cent in July, unemployment in the former communist east is still more than double of that in western Germany. The July jobless rate in the west was 8.4 per cent.
