German unemployment fell again in October, but the effects of the financial crisis lingered and it was still too early to expect a turnaround in the economy, the country"s labor ministry said, according to AP. The unadjusted jobless rate in Europe"s biggest economy was 7.7 percent, down from 8 percent the previous month and below the 8.3 percent in August, the Federal Labor Agency said. A total of 3.229 million people were registered as unemployed _ 118,000 fewer than the previous month. «The economic crisis can be seen on the job market also in October,» agency head Frank-Juergen Weise said. «However, that development has calmed down a little bit during the last months.» Despite the second consecutive drop, Weise said it remained premature to speak of a full-blown economic turnaround in Germany. The dip in unemployment comes nearly two weeks after the German government raised its growth forecast and predicted that Europe"s biggest economy will 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 will shrink by 5 percent instead of the 6 percent foreseen in April. Germany"s export-fueled economy returned to modest growth in the second quarter following a deep recession, and business confidence and industrial orders have been improving. Yet despite consumer and business confidence being on the upswing, unemployment is still set to rise: the government forecast that the number of Germans out of work will average 3.5 million this year and increase to 4.1 million next year. That compares with 3.3 million in 2008. Unemployment, so far, has been kept in check by employers" use of government-supported short-time working arrangements rather than layoffs. Alexander Koch, an economist with UniCredi said that while Germany"s economic fortunes have improved, the recent resilience of the labor market cannot yet be interpreted as a turnaround. «The official unemployment figures are still dampened due to statistical changes,» he said, adding that the «high number of government-subsidized short-term employees strongly helps to mitigate the rise in unemployment.» --SPA
