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German jobless hits two decades low

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German jobless hits two decades low
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German unemployment fell sharply for a second straight month in March. The jobless rate – adjusted for seasonal factors – is down to 7.1 percent of the workforce.

That was the lowest level since figures for a unified Germany were first published two decades ago.

The decline, helped by mild weather conditions, brought the overall unemployment total in Europe’s largest economy to 3.005 million.

The Federal Labour Office said unemployment fell by 55,000 in March after a drop of 54,000 in February.

Labour Office head Frank-Juergen Weise said demand for labour was “high” and that growth in full-benefits paying jobs was continuing.

The German government used a number of job boosting schemes, including ‘Kurzarbeit’ subsidies for those put on part time work, to cushion the blow from a record contraction in gross domestic product in 2009.

The measures helped the German labour market outperform other European countries at the height of the global financial crisis and the economy has gone from strength to strength since.

Still, a strong increase in low wage jobs and rising inflation driven by high energy prices have prevented private consumption from taking off in the way some economists were predicting last year. That has left the German economy highly dependent on export growth.

Data from the Federal Statistics Office showed an unexpected 0.3 percent drop in real retail sales for the month of February in a sign that rising prices, driven by high oil, may be hitting consumer demand.