Number of Germans out of work falls to 18 month low

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Number of Germans out of work falls to 18 month low

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German unemployment dropped in February to its lowest level in nearly a year and a half.

The number of people out of work in Europe’s largest economy decreased by 14,000 to 2.914 million, in figures adjusted for seasonal factors like weather.

It was the third consecutive monthly drop in joblessness.

That is a good sign for domestic demand, which the government hopes will help drive economic growth this year.

Frank-Juergen Weise, the head of the Federal labour service said: “Employment and social security contributions are increasing and the demand for workers has increased slightly. The prospects for unemployed people improve.”

The Federal Statistics Office said employment was at a record high of almost 42 million.

That – along with moderate inflation, an expected rise in wages and low interest rates – should encourage traditionally thrifty Germans to spend rather than save.

However some economists point to weak exports, industrial output and orders at the end of last year raising questions over the economy.

And some businesses are cutting jobs. Barmer GEK, Germany’s largest statutory health insurance provider, said this week it was slashing 3,500 workers, or 20 percent of total staff, in response to deteriorating market conditions and changes in client behaviour.