German Unemployment At Record Low as Recovery Strengthens

German Unemployment Falls to Record Low
A sign which reads 'jobcenter' sits on a window inside a job center in Hamburg. Unemployment fell by 17,000 in western Germany and 10,000 in the eastern part of the country, today’s report showed. Photographer: Krisztian Bocsi/Bloomberg

German unemployment fell for a third month in December to a record low, signaling that growth in Europe’s largest economy will accelerate in 2015.

The number of people out of work fell a seasonally adjusted 27,000 to 2.841 million in December, the Federal Labor Agency in Nuremberg said today. Economists predicted a decline of 5,000, according to the median of 19 estimates in a Bloomberg News survey. The adjusted jobless rate dropped to 6.5 percent, the lowest level in records going back more than two decades.

After Germany’s economy narrowly avoided a recession in the middle of 2014, recovering sentiment among entrepreneurs and investors supports forecasts that growth will accelerate this year. A slump in oil prices and a weaker euro could prove a boon for consumers and exporters, and the European Central Bank is weighing large-scale government-bond purchases as additional stimulus.

“Germany’s buoyant labor market continues to be a reliable driver of growth,” Johannes Gareis, an economist at Natixis SA in Frankfurt, said before the report. “The tightness of the labor market backs household confidence and supports wage growth and thus private consumption.”

Unemployment fell by 17,000 in western Germany and 10,000 in the eastern part of the country, today’s report showed.

Grammer AG, a maker of car seats and interiors, said it is expanding its production plant in Rastatt, Germany, and hiring new staff in response to strong demand.

In the euro area, unemployment probably remained at 11.5 percent in November, according to a separate survey. Eurostat, the European Union’s statistics office, will publish the data at 11 a.m. Luxembourg time.

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