German unemployment falls to lowest in 18 years
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