German unemployment fell for the fifteenth consecutive month in September, the nation's labor office said Thursday, as the buildup of economic momentum during the first half of the year encouraged employers to hire workers. According to dpa, the numbers out of work in Europe's biggest economy dropped this month by a seasonally-adjusted 40,000 to 3.146 million, the lowest level in nearly two years. This pushed the September jobless rate down to 7.5 per cent from 7.6 per cent last month. This month's fall was double what analysts had predicted and followed a 17,000 fall in unemployment in August. "The German labor market has defied many skeptics and it is hard to find reasons why the current trend on the labor market should not continue," said ING Bank economist Carsten Brzeski. Based on the politically more important seasonally unadjusted terms, the jobless queues contracted by 157,000 to 3.031 million. The unadjusted unemployment rate now stands at 7.2 per cent compared with 7.6 per cent in August. The steady decline in the numbers out of work is helping to fuel hopes that Germany's recovery is broadening with consumer confidence in the country having surged to a three-year high, a survey published Tuesday showed. In particular, the fall in unemployment has pointed to the possibility of a pickup in domestic demand offsetting a fall in exports. This follows predictions that the world economy will slow in the run-up to the end of the year, dampening German foreign orders. The projections of another drop in unemployment came despite further moves by companies to wind back the numbers of workers employed on so-called short-term labor contracts. Backed by government subsidies, the short-term labor contracts have helped industry to avoid making mass layoffs during the recession that took hold last year. But key forward-looking economic indicators are already pointing to business expectations that German economic growth will slow as the US economy runs out of steam and governments around the world roll back anti-recession stimulus programs. After expanding by a more-than-forecast 2.2 per cent during the second quarter, the German economy is forecast to lose ground in the coming months. The European Commission expects the nation's expansion rate to slow to 0.6 per cent during the three months to the end of September and to 0.4 per cent in the final quarter. Still, the commission expects the German economy to grow by a solid 3.4 per cent during 2010 on the back of the strong economic performance during the first half of the year.
