German jobless rate down to 7.2 percent as economic strength boosts labor recovery

German jobless rate down to 7.2 percent

BERLIN — Germany’s unemployment rate dropped to 7.2 percent in September as the strength of Europe’s biggest economy helped the labor market recover quickly from the crisis, data showed Thursday.

The unadjusted jobless rate was down from 7.6 percent in August, the Federal Labor Agency said, with 3.031 million people registered as unemployed.

That figure was 157,000 lower than in August, and 315,000 lower than last September.

“The good economic development continues to have a positive effect on the labor market,” labor agency chief Frank-Juergen Weise said. “Companies’ demand for labor is high.”

Unemployment figures typically improve in September as businesses step up hiring after the summer vacation. However, the latest in a string of drops in seasonally adjusted figures underlined a real downward trend.

The seasonally adjusted jobless rate slipped to 7.5 percent from 7.6 percent, with the number of unemployed dropping 40,000 on the month — the highest figure since May.

Germany’s economy grew a massive 2.2 percent in the second quarter over the previous three-month period. That export-led surge has helped boost Germans’ optimism about jobs and income and push up consumer confidence — raising hopes that long-sluggish domestic demand will pick up.

“We have good chances of seeing a golden autumn on the labor market,” Economy Minister Rainer Bruederle said. “The economic upswing is gaining breadth and reaching ever more people.”

Even at the height of the economic crisis, a government-subsidized short-time work plan that allowed employers to reduce production without cutting employees kept the jobless rate in check. The unadjusted rate peaked at a relatively low 8.7 percent in February this year.

Recent months’ figures have shown that the German labor market is resilient even as the short-work program’s importance fades.

The labor agency estimated that, in July — the latest month for which it has figures — 288,000 people were in the short-work program, 111,000 fewer than in June and down nearly four-fifths from its peak in May 2009.

“Overall, labor market conditions will continue to improve in the months ahead,” said Timo Klein, an economist at IHS Global Insight. “Second-quarter GDP data has shown that not just exports but also domestic demand is recovering strongly now.”

Germany’s “labor market flexibility has enabled companies to respond to the upturn in global demand since mid-2009 quite rapidly, unlike in countries where staff has to be hired anew,” Klein said.

Yet with global growth showing signs of slowing and austerity plans on the menu across Europe, no one expects Germany to match its spectacular second-quarter growth in the months ahead.

Even so, Klein said he “expects seasonally adjusted unemployment to continue to decline throughout 2010 and 2011.”