Frankfurt, Germany (AFP) - Germany unemployment fell to seven per cent of the workforce in may, official data showed Tuesday, but a slower pace of decline and muted retail sales took shine off the coast of the results.
The Federal Labour Agency, said that non-adjusted unemployment had dropped below $ 3 million in the biggest European economy, with a fall of 118 000 bearing the symbolic figure politically to 2,960,000.
By adjusting for seasonal and calendar effects, he came to 2.974 million, "well below the mark of 3.190 million of seen at the end of the previous boom in October 2008," Economist IHS Global Insight Timo Klein noted.
The unemployment rate of 7.0% is the level the lowest for the Germany, since records have been compiled after its reunification at the end of the 1990s.
"The market reforms of the work undertaken in 2003-2005 continue to make strong positive impact on employment," Economist of the Bank Berenberg Christian Schulz commented.
By adjusting for seasonal and calendar effects the decline was a much more modest 8,000 however, way below average 30 000 autumn forecast analyst compiled by Dow Jones Newswires.
That compared to an average decrease of approximately 38 000 per month during the period from January to April, also indicating that unemployment fell to a much slower pace, perhaps because the best time earlier this year moved decreases up to a few months.
In all of the 17-nation euro zone, unemployment remains unchanged in April to 9.9% for the third month running, the official figures of the European Union has shown.
"Compared to the EMU as a whole and any particular countries in debt crisis, the performance of the labour market remains outstanding" in Germany, UniCredit Economist Alexander Koch said.
But the steady decline has not yet produce an equivalent increase in consumer spending.
Earlier Tuesday, the Office of national statistics said retail sales gained 0.6% in April, following a slump revised from 2.7% in March.
The new data "still shown main dilemma of the German economy: while the labour market remains the showcase of the recovery, private consumption is that slow to take off,"Economist main ING Carsten Stories "said."
German manufacturers have well garnished order books and invest more, and the demand for labour should remain strong, analysts say, with some warning of shortages.
The Ifo Economic Research Institute said Tuesday that his last German credit conditions survey showed "restarting the economy in Germany is being fueled by domestic investment activity exceptionally strong which is supported, if triggered, by the favourable terms of credit for banks."
Many economists have revised their estimates of German growth 2011 higher to 3.0% or more, from the official forecast of 2.6%.
"Overall, the economic recovery seems to have enough endurance home for lead to declining continuously unemployed during 2011-2012," Klein said.
Yet "for the future, it is clear that German consumers will not participate in a frenzy of spending," put Stories in custody, even if "the fundamental principles for a decent consumption boom in Germany have hardly been better since reunification."
