German unemployment defies economic depression

German unemployment has defied the current economic gloom and has fallen by more than economists’ prediction of a 10,000 reduction during this month.

Following the fall in September by 29,000, it has fallen another 26,000 this month to 3.151 million according to the statistics released yesterday by the German Federal Labour Office.

It was predicted that unemployment would drop as the German labour market still remains strong as a result of the strength of the economic growth rate, even though at the start of the year the economy was predicted to contract.

German unemployment has fallen below the 3 million mark for the first time in 16 years and it represents the largest drop since the reunification of the country which is a feat in the current climate.

Holger Schaefer, a Berlin-based labour market economist, with the IW institute said that the current state of unemployment is remarkable given that it came from 5 million, stating that policy makers have done a good job.

Despite the praise Schaefer has said that there is no room for complacency as German companies are now scrutinising their payrolls in order to tighten up their finances in a bid to ride out the credit crunch.

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