German Joblessness Hits Record Low as Companies Face BottlenecksBy
Unemployment down by 25,000 vs. estimated 17,000 drop
Rate reaches record low of 5.4 percent at start of 2018
German unemployment extended its decline at the start of the year as companies in Europe’s largest economy stepped up hiring to meet buoyant demand.
The jobless rate dropped to a record low of 5.4 percent in January, the Federal Labor Agency in Nuremberg said on Wednesday. The number of people out of work plunged a seasonally adjusted 25,000 to 2.415 million. Economists surveyed by Bloomberg forecast a drop of 17,000.
Strong global trade and domestic spending have been a boon for Germany’s economy, which the Bundesbank sees expanding by the most in seven years in 2018. With manufacturing activity near the highest level in two decades and growing order books stretching capacity, companies are piling on workers.
In another sign of pressure in the country’s labor market, Germany’s most powerful union is facing off with employers over demands for higher pay and more flexible working hours. Workers are staging day-long strikes this week across several locations after companies pushed back against calls for more free time, arguing that existing labor scarcity already makes it difficult to keep up with production demand.
Joblessness fell by about 16,000 in west Germany and by 8,000 in the eastern part of the country. The German number comes ahead of a euro area-wide report that will probably show unemployment in the 19-nation currency bloc held at a nine-year low of 8.7 percent at the end of last year.
— With assistance by Andre Tartar, and Kristian Siedenburg