German unemployment dropped more than economists forecast in November, as companies’ resilience to the euro area’s debt woes showed no sign of cracking.
The number of people out of work fell a seasonally adjusted 20,000 to 2.91 million, the Nuremberg-based Federal Labor Agency said today. Economists forecast a decline of 5,000, the median of 33 estimates in a Bloomberg News survey showed. The adjusted jobless rate dropped to 6.9 percent.
Companies in Europe’s largest economy are adding workers even as the region’s worsening fiscal crisis clouds growth prospects. While Jim O’Neill, chairman of Goldman Sachs Asset Management, said today the euro-area economy may already be in a recession, German business confidence rose in November and consumers also became more optimistic.
“The German labor market is proving robust,” Heinrich Alt, the labor agency’s deputy head, told reporters in Nuremberg. “The financial and political turbulence of the debt crisis hasn’t worked its way to the real economy. Exports are functioning. Let’s hope it stays that way.”
The euro declined 0.2 percent to $1.3286 as of 11:41 a.m. in Berlin. The single currency has depreciated about 8 percent against the dollar over the past three months.
Euro-area finance ministers approved enhancements to their bailout fund at their meeting in Brussels yesterday, while backing off from setting a target for its firepower and seeking a greater role for the International Monetary Fund in fighting the region’s turmoil. Leaders agreed last month to provide the guarantees to restore investor confidence in banks.
Euro-region unemployment rose to 10.3 percent in October from 10.2 percent in the previous month, the European Union’s statistics office in Luxembourg said today. That’s the highest since June 1998, before the euro was introduced.
With governments cutting spending to plug their budget gaps, the European Commission on Nov. 10 lowered euro-region growth forecasts for this year and next to 1.5 percent and 0.5 percent, respectively. Germany’s economy may outpace growth in the region, with gross domestic product rising 2.9 percent and 0.8 percent, the Brussels-based commission said.
Sports-car maker Porsche AG plans to add as many as 1,000 jobs a year through 2018 to sustain an expansion in models and sales, personnel chief Thomas Edig said on Nov. 25. Airbus SAS, whose German production sites include Hamburg, wants to hire a total of 4,000 workers next year, Boersen-Zeitung cited Chief Executive Officer Thomas Enders as saying Nov. 24.
The labor agency’s BA-X index, a measure of employment intentions, jumped 8 points to 179 in November, the highest since the gauge was introduced in 2004. Demand for lease workers accounts for one third of openings, the agency said yesterday. That contrasts with a gauge of euro-region manufacturers’ employment expectations slumping in November.
“The impressive labor market upswing is not over yet,” said Alexander Koch, an economist at UniCredit Group in Munich. “The solid employment situation remains the key support factor for household demand in Germany.”
Bayerische Motoren Werke AG, the world’s largest maker of luxury vehicles based in Munich, remains “confident for 2012,” Chief Financial Officer Friedrich Eichiner said on Nov. 15. He also predicted “double-digit” percentage sales growth next year in the U.S., which will likely overtake Germany as the carmaker’s largest maker in the near future.
German exports will probably breach the 1 trillion euro ($1.3 trillion) level this year for the first time as demand from developing states offsets waning sales in Europe, the BGA exporters and wholesalers group said yesterday.
The U.S. Institute for Supply Management-Chicago Inc. may say today that its business barometer for the world’s largest economy rose to 58.5 in November from 58.4 in the previous month, according to a Bloomberg survey. The number of contracts to purchase previously owned homes probably rose in October, according to a separate survey.
This month’s drop in German joblessness resumes a decline that only ended in October with the first unemployment increase since June 2009. The labor agency revised that figure down today to 6,000 in adjusted terms from the 10,000 initially reported.
The latest figures show that last month “is likely to have been a blip,” said Christian Schulz, a former European Central Bank economist now working for Berenberg Bank in London.
“If the crisis is resolved soon, the impact on the labor market may remain negligible as companies learned the value of hanging on to their staff in the last recession,” Schulz said in an e-mailed comment. “If the rescue fails, the labor market will not escape unscathed.”
Companies may struggle to maintain their sales growth as the euro-region economy shows signs of a deepening slowdown just as global demand falters. South Korea’s industrial output fell, India’s economy grew the least in more than two years and Thailand cut interest rates, reports showed today.
Schaeffler AG, the roller-bearing maker that controls Continental AG, said on Nov. 22 revenue growth in the fourth quarter may be restrained because of slowing demand for machine parts in Europe. The company said it’s monitoring the current financial crisis “very closely.”
The euro region is in a “mild” recession, with the area likely to grow 1.6 percent this year and 0.2 percent in 2012, the Paris-based Organization for Economic Cooperation and Development said Nov. 28, citing the turmoil as the main risk.
Germany’s jobless rate was 5.8 percent in September, according to the latest harmonized OECD figures. That compared with 9.1 percent in the U.S., 9.9 percent in France, 8.3 percent in Italy and a EU average of 9.7 percent.
“European growth is extremely weak, we’re probably already in a recession,” O’Neill told Francine Lacqua on Bloomberg Television’s “On the Move” in London today. “We need proper leadership in the European crisis.”