Ger­man un­em­ploy­ment falls to low­est in 18 years

The Pak Banker - - International3 -

BER­LIN: Ger­man un­em­ploy­ment fell for a 17th month in Novem­ber as busi­ness op­ti­mism im­proved, un­der­scor­ing the gulf be­tween Europe's biggest econ­omy and pe­riph­eral na­tions strug­gling to cut debt.

The num­ber of peo­ple out of work de­clined a sea­son­ally ad­justed 9,000 to 3.14 mil­lion, the low­est since De­cem­ber 1992, the Nurem­berg-based Fed­eral La­bor Agency said to­day. Econ­o­mists fore­cast a de­crease of 20,000, ac­cord­ing to the me­dian of 31 es­ti­mates in a Bloomberg News sur­vey. The ad­justed job­less rate re­mained at 7.5 per­cent.

Ris­ing pay­rolls help bol­ster do­mes­tic de­mand in Europe's most pop­u­lous coun­try, less­en­ing Ger­man re­liance on ex­ports and shoring up slower-growth economies in Greece, Ire­land, Por­tu­gal and Spain. Ger­man re­tail­ers are en­joy­ing a "dream start" to the Christ­mas shop­ping sea­son, the HDE in­dus­try fed­er­a­tion said yes­ter­day, as the Euro­pean Union said a big­gerthan-ex­pected "spillover" from Ger­many may be com­ing to Europe's aid.

"The Ger­man econ­omy stands at the eve of a vir­tu­ous cir­cle for do­mes­tic de­mand," said Carsten Brzeski, an econ­o­mist at ING in Brus­sels. "Com­bined with a gen­er­alfeel-good fac­tor, Ger­man con­sumers seem set to fi­nally spend their way out of the re­ces­sion dur­ing the Christ­mas shop­ping sea­son."

The euro fell against the dol­lar to­day on con­cern that the debt cri­sis in Ire­land will spread to other euro na­tions. The cur­rency was at $1.2987 as of 10:05 a.m. in London from $1.3125 yes­ter­day. Porsche En­gi­neers Ger­man busi­ness con­fi­dence un­ex­pect­edly surged to a record in Novem­ber as do­mes­tic spend­ing in­creased, the Ifo in­sti­tute said on Nov. 24. Ifo's gauge of ex­ec­u­tives' ex­pec­ta­tions also rose to a record.

Porsche SE will hire more than 100 en­gi­neers in the com­ing weeks and in­crease ca­pac­ity at a cen­ter in Weis­sach, Ger­many, it said Nov. 18. Bay­erische Mo­toren Werke AG will add 500 work­ers to its en­gines plant in Mu­nich, Fo­cus mag­a­zine re­ported this week, cit­ing works coun­cil head Man­fred Schoch.

The Ber­lin-based DIW in­sti­tute said yes­ter­day that the Ger­man econ­omy will main­tain its pace of re­cov­ery in the cur­rent quar­ter, fore­cast­ing ex­pan­sion of 0.7 per­cent. Con­sumer spend­ing is in­creas­ingly be­com­ing an "en­gine of growth," it said.

The re­vival of do­mes­tic de­mand may boost man­u­fac­tur­ing across the euro re­gion, help­ing re­cov­er­ies in so-called pe­riph­eral na­tions in­clud­ing Ire­land and Por­tu­gal, whose gov­ern­ments are strug­gling to re­duce bud­get deficits.

"The spillover from the pick-up in ac­tiv­ity in Ger­many to other mem­ber states may ma­te­ri­al­ize to a greater ex­tent than cur­rently en­vis­aged," Euro­pean Union Eco­nomic and Mon­e­tary Af­fairs Com­mis­sioner Olli Rehn said in Brus­sels yes­ter­day.

The Euro­pean Com­mis­sion, the EU's ex­ec­u­tive body, fore­cast 2.2 per­cent eco­nomic growth in Ger­many in 2011 af­ter 3.7 per­cent this year, the fastest pace since the re­uni­fi­ca­tion of East and West Ger­many in 1990. -Ap

SCOT­LAND: Farmer Peter Laid­law feeds cat­tle at Craigan­net Farm near Car­ronbridge, cen­tral Scot­land, as heavy snow con­tin­ues across the coun­try Tues­day. Al­most ev­ery corner of the UK woke up to be­tween 2cm and 10cm of fresh snow on Tues­day, with Bri­tain's east coast worst hit by flur­ries and sub-zero tem­per­a­tures. -Afp

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